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Ongoing fiscal adjustment, declining real wages and weak exports are deepening the recession. Unemployment has reached historical highs, increasing social strains. Despite improving confidence over recent months, positive growth is expected only in the course of 2014 as export demand strengthens, competitiveness improves further and investment returns. Sluggish product market reforms are blunting the effects of lower wages on price competitiveness.

The structural consolidation of public finances needs to continue, but the automatic stabilisers should be allowed to operate if growth proves weaker than anticipated. This might require additional funding under the EU-IMF programme. Restoring credit growth is a pre-requisite for reviving economic activity. The rapid removal of remaining barriers to competition would enhance competitiveness and growth.

Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.

Link to eXplorer tool

Link to Excel of selected projections (flash file) and dotStat