GDP growth is projected to strengthen to 4.7% in 2022 and 2023, as the improving health situation underpins the rebound of domestic demand, exports of raw materials increase and tourism slowly restarts. The rise in inflation, however, is already damping consumers’ purchasing power and demand for durable goods. The output gap will remain considerable, limiting at least initially the pass-through of higher global commodity prices to consumer prices. However, the current account deficit will rise.
The COVID-19 crisis has brought to the fore the vulnerability of the population to economic shocks, notably due to extensive informality, lagging skills and low social security coverage. Reforms in areas of skills, labour market regulation and barriers to entrepreneurship are hence top priority for a more resilient and equitable growth.
©Shutterstock/Anton PetrusRead full country note
2021 Structural Reform Priorities