This 2005 Article IV Consultation highlights that New Zealand's GDP growth was particularly strong in 2004, at 4.8 percent, led by a surge in domestic demand. Private consumption grew by 6 percent, reflecting high employment growth, strong commodity prices, and household borrowing against rising housing values. Business investment also increased rapidly, powered by robust sales, and strong profitability. Growth is projected to slow in the near term, to about 2¾ percent in 2005-06. Consumer spending is expected to moderate owing to a cooling of the housing market and the effects of higher interest rates.