|Output is set to contract for the third year in a row in 2014. Rising unemployment and mounting uncertainties are undermining business and consumer confidence. Fiscal tightening is also weighing on economic activity. The upturn in both domestic and foreign demand is projected to be slow, as subdued income growth holds back consumption, global growth remains sluggish and ample spare capacity delays a pick-up in investment.
The implementation of the government’s structural reform programme to increase labour force participation and public sector efficiency is critical to ensuring fiscal sustainability over the longer term, as age-related spending increases.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.