GDP is estimated to have fallen by 3.5% in 2020 and is projected to grow by 2.9% in 2021 and 3.8% in 2022. After a strong rebound in the third quarter of 2020, owing to pent-up consumption and government support, output is set to fall again in end-2020 as new restrictions have been introduced to contain the second outbreak of the virus. Domestic demand will regain momentum in 2021 and 2022, with the prospect and actual deployment of an effective COVID-19 vaccine. Unemployment is expected to peak in 2021 and slowly decrease afterwards. The rollback of fiscal support in 2021 should be prudent to avoid hurting the recovery. Policy support could be better targeted to the most vulnerable households and firms. Subsidising social security contributions for low-income workers on standard contracts would make the recovery more inclusive and strengthening lifelong learning opportunities for low-skilled workers would also improve labour reallocation. Public investment to improve interregional infrastructure and to green the energy mix would simultaneously support the recovery and help to meet environmental objectives.