With a significant majority in parliament, the "grand coalition" government of the Social Democratic Party (SPO) and the Austrian People's Party (OVP) is expected to remain secure over the outlook period. There are evident tensions within the coalition, but there is no obvious viable alternative, and both parties' interests will be better served by remaining in office. The coalition has pursued many of the pro-business policies promoted by the previous centre-right government, while also placing a greater emphasis on social programmes, education reform and the introduction of a national minimum wage. Spending on infrastructure and on research and development will increase, but with tax revenue rising strongly, the government deficit is expected to fall below 0.5% of GDP over the forecast period. The economy will grow by 3.2% in 2007 and an average of 2.4% in 2008-09. Annual inflation will average 2%.