After strong GDP growth in the second half of 2021, the war in Ukraine will take a toll. Real GDP is projected to expand by 4.4% in 2022 and by 1.8% in 2023. Consumption and, to a lesser extent, investment growth is expected to slow considerably, partly offset by fiscal policy. Inflation is expected to peak by the end of the year as the rise in energy prices slows and monetary policy tightens. Core inflation is projected to decrease but is likely to remain elevated at the end of 2023.
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The COVID-19 crisis has exposed long-standing issues in the health care sector, including the vulnerability of the population to respiratory illnesses linked to high air pollution. The main medium-term challenges are linked to the shortages of skilled workers and prevalence of micro and smaller firms with low productivity and weak connections to local, national and international markets. Addressing such challenges is key for digital and green transitions and ensuring their inclusiveness.
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2021 Structural Reform Priorities