Growth is set to slow to 4.1% in 2022 and 2.2% in 2023 due to heightened uncertainty, high inflation and slower external demand. Household savings accumulated during the pandemic, the fiscal package to mitigate the effects of the war, continued recovery in employment and the Next Generation EU funds will support domestic demand. The ongoing recovery in tourism will also support growth. Headline inflation will moderate in 2023, but remain high.
A strong, resilient and inclusive recovery from the COVID-19 crisis requires improving productivity growth, by boosting digitalisation, innovation, and investment in intangible capital. It also requires addressing long-standing structural problems in the labour markets, reinforced by the pandemic: high unemployment, insufficient skills, large regional variation and a large share of workers on non-regular contracts.
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2021 Structural Reform Priorities