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Economic activity, which has so far been mainly driven by exports, is expected to decline in 2012. As domestic demand gradually improves, growth should return in 2013. A weak currency, rising oil prices and hikes in indirect taxes have significantly increased prices, though their effects should moderate gradually.

Following a major cumulative increase in the structural deficit in 2010 and 2011, fiscal consolidation has resumed with a view to restoring sound public finances and exiting from the EU excessive deficit procedure. Budget adjustment will weigh on activity in 2012 and 2013. Rapidly reaching an agreement with the IMF and the EU – which is assumed in the projections – would restore investor confidence, create conditions for monetary accommodation and boost growth.