After a strong recovery in 2021, growth will moderate over the projection period. Very high inflation and declining consumer confidence will limit consumer spending. Investment will be held back by uncertainty about geopolitical factors and financial conditions. While exports will continue to benefit from the reallocation of global supply chains, the war in Ukraine will adversely affect external demand and commodity prices. Accommodative monetary policy coupled with high commodity and food prices will keep consumer inflation above 70% in 2022.
For a more inclusive and sustained recovery structural challenges such as low labour force participation of women, widespread informality, weak skills, rigid employment rules hampering reallocation and large share of low-quality employment have to be addressed. The COVID-19 related contraction in economic activity affected informal workers the hardest, as many work in contact-intensive services such as tourism, catering and retail trade.
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Read full country note2021 Structural Reform Priorities