|After real GDP declines in the first half of 2014, activity is set to recover gradually. Nonetheless, growth will remain modest due to tighter monetary and fiscal policies, weak external demand, low levels of investment and persistent infrastructure bottlenecks. Inflation will only come down slowly, as overdue increases in administered prices are likely to push up inflation temporarily.
As fiscal performance has deteriorated, more fiscal discipline will be needed in the coming years to ensure a sustainable reduction of gross public debt. A tighter fiscal stance will also make it easier for monetary policy to bring inflation down to the target. Faster progress in infrastructure investment, lower trade barriers, less administrative burdens and a comprehensive tax reform would all ease supply constraints and raise growth.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.