The economy is projected to grow by about 5% per annum in 2021 and 2022. Economic activity is expected to rebound from mid-2021 onwards, as a swift vaccination rollout supports the recovery of private consumption. External demand will strengthen with the recovery in major European trading partners. The labour market will continue to improve, while high wage growth and a recent currency depreciation will further add to inflationary pressures.
To ensure a speedy recovery that benefits all, the improvement of the business environment and skills should be on top of the policy agenda. State-intervention and regulatory barriers hamper market entry and dampen productivity. Low graduation rates from tertiary education, weak vocational training outcomes and high drop-out rates lower employment prospects of young adults, who are at risk of long-term scarring given the impact of the pandemics on the labour market.
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2021 Structural Reform Priorities