After contracting sharply in 2020, GDP is projected to grow by 2.5% and 3% in 2021 and 2022, respectively, and 3.9% in 2023. The removal of most containment measures amid steady progress with vaccinations will support a rebound in services and boost household consumption. Meanwhile, exports and manufacturing activity will face headwinds until mid-2022 due to supply bottlenecks. Unemployment will continue to fall and the labour market will tighten. Currently high inflation is expected to rise further in early 2022, but then subside toward the 2% target level by late 2023.
The recovery offers an opportunity to focus on productivity-enhancing investment and upskilling, including better targeting of R&D support and improved business environment.
©Shutterstock/Anton PetrusRead full country note
2021 Structural Reform Priorities