The recovery is gaining momentum, driven by export-market growth, improving confidence and generally favourable financing conditions. Private consumption will be subdued in the near term-term but will pick up thanks to strengthening employment growth and real income gains.
Fiscal consolidation remains broadly on track and the automatic stabilisers should be allowed to work freely around the planned structural improvement path. Further consolidation should focus on spending restraint, especially early retirement expenditures. Reducing obstacles to the employment of older workers, closing remaining pathways into early retirement and reflecting life expectancy more directly in old-age pension entitlements would all help to raise labour supply and growth.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.
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