Driven by exports and investment, demand and output in Austria are growing by 2.6 percent in volume in 2006, the highest rate since 2000. By contrast, the momentum of private consumption remains subdued, despite the boost to net incomes from the tax reform. The jump in oil prices is hardly giving rise to second-round effects via wage increases, thereby holding back inflation, but also real income gains. In 2007, the one-off effects from Germany will turn negative, slowing GDP growth in Austria to 2.1 percent.