Real GDP growth is projected at 1.8% in 2023 and 0.9% in 2024. The new economic policy package will support domestic demand, partly offsetting subdued household confidence and real income. Loss of momentum in trading partner economies will moderate exports. After peaking in the course of 2022, headline consumer price inflation will fall back in late 2023 as energy prices stabilise, but then gradually increase again towards 2% in 2024 as wage growth gains momentum.
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The COVID-19 pandemic hit the economy hard, provoking a marked downturn. Economic activity tumbled as sanitary restrictions restrained consumption and investment. Workers and households with weaker attachment to employment tended to be most affected. However, robust government support and the reopening of the economy led to a partial bounceback. Growth is on course to regain momentum, supported by macroeconomic policies and progress in vaccination.
Mindful of the strong population ageing already underway, the COVID-19 recovery strategy needs to enhance labour force participation and spur business dynamism. Moreover, significant potential to expand use of digital technologies, in both the public and the private sector as well as education, should be seized.
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2021 Structural Reform Priorities