|Growth will gain momentum over the next two years. Further improvements in export performance will be the main driver of the continuing recovery in 2015, and the contribution of domestic demand will become larger in 2016 as investment and private consumption pick up. Unemployment is set to fall further but will remain high, putting a lid on wage and price increases.Very low inflation will support competitiveness, but it also makes it more difficult for the corporate sector to reduce its debt.
A rebalancing towards the tradable sectors is underway, but would be strengthened by more competition in service sectors, a reformed and efficient judicial system, lower taxes and better innovation performance. Progress achieved in reforming the wage bargaining system has been crucial to rebalancing, and needs to be preserved. To reduce poverty and inequality, the redistributive impact of the benefit system should be strengthened in a budget neutral way.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.