The Australian economy is expected to record solid growth in real GDP in 2005‑06 after passing through a soft patch in 2004-05. Strong world demand for commodities will benefit Australia through increasing export volumes and higher terms of trade, both of which will support strong growth in national income. Gross national expenditure is forecast to grow at more moderate rates in 2004‑05 and 2005‑06 after a period of exceptionally strong growth in recent years. Employment growth is forecast to ease towards trend in 2005-06, while inflation is expected to remain moderate.