Growth is projected to strengthen as higher export market growth boosts investment and exports, especially in the automotive industry. Private consumption will continue to grow, but is likely to face headwinds due to unfavourable conditions in a labour market characterised by high and persistent unemployment. Budgetary measures needed to reach a targeted fiscal deficit below 3% of GDP in 2014 will damp domestic demand.
Constitutional debt ceilings are becoming binding and limit the flexibility of fiscal policy. Strengthening active labour market programmes is needed to make growth more job-intensive while sustaining productivity improvements. Public spending on infrastructure and education should remain a priority.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.