The re-introduction and expansion of the fourth state of emergency in July held back the economic recovery. Significant progress in vaccination and falling rates of infection are now supporting the resumption of stronger consumption growth and lifting investment, as supply chain disruptions are resolved. A new economic policy package will boost activity. As a result, the economy is projected to grow by 1.8% in 2021, 3.4% in 2022 and 1.1% in 2023.
With the recovery still to gain traction, policy support remains important, especially for the most affected households and businesses. Fiscal support can also improve well-being and the outlook in the longer term, such as by strengthening the medical system and by investing in human resources, technology and infrastructure. Along these lines, the new economic package will both spur the economy in the short run and support longer-term growth. Once the recovery is secured, the government should resume fiscal consolidation efforts to ensure longer-term sustainability.