Growth is projected to slow down as tight credit conditions and an uncertain business environment limit investment, and fiscal stimulus is about to come to an end. Inflation is projected to gradually converge to the 3% target and unemployment to stabilise over the projection horizon. Export dynamism will underpin a sizeable current account surplus.
Pro-competitive reforms in non-tradable sectors are key to stronger investment and productivity growth in the medium run. A better operating environment for banks would also reinforce growth potential through greater credit availability. After strong fiscal expansion in 2014, the authorities should gradually return to their medium-run fiscal targets, to sustainably reduce debt and build room for manoeuvre for future downturns.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.