The recovery of economic activity has been swift and growth will reach 8.5% this year and 5.8% in 2022, assuming that the sanitary situation remains under control. Investment will remain a key engine of growth, while consumption will recover only gradually. Robust export demand will keep industry capacity utilisation high. The low import content of consumption means that the surge of imported raw material prices will only have a limited impact on consumer price inflation.
The pandemic highlighted weaknesses in the health and social security systems and pushed many households and firms to the brink of bankruptcy. It further widened inequalities between: (i) central provinces and the coast; (ii) already indebted poor households and wealthier ones and (iii) the private sector, with limited access to infrastructure contracts and hardly hit by slackened demand, and the state-owned sector. Such divides need to be addressed to make growth inclusive and sustainable.
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2021 Structural Reform Priorities