|Output growth will turn positive in the course of 2014, gaining additional strength in the following year as expanding global markets and improved competitiveness boost exports and investment. The unemployment rate will edge down slowly. Substantial excess capacity and adjustment pressures will keep prices and wages falling, although the pace of decline will moderate. The current account is set to remain in surplus.
Further fiscal consolidation is needed to reduce the high level of debt, but automatic stabilisers should be allowed to work around the consolidation path. Additional debt relief, for instance an extension of maturities and lower interest rates on existing loans, might be necessary to achieve fiscal sustainability. The economic recovery also hinges on better access to credit, underscoring the importance of implementing plans to restructure bank balance sheets. Further reducing impediments to competition would promote investment and growth.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.