The economy is projected to grow by 3.2% in 2021, 5% in 2022, and 4.8% in 2023. Consumption and investment rebounded in the second quarter on the back of easing pandemic containment measures, but growth moderated in the third quarter. Rising infections, relatively low vaccination rates and supply disruptions will weigh on economic activity in the near term. The recovery will accelerate in 2022 and 2023 mainly on the back of strong investment growth, aided by EU Recovery and Resilience Facility and EU structural funds. Possible further restrictions and a slower absorption of EU funds could weaken the recovery.
Targeted policy support should be maintained until the recovery is firmly underway. Stepping up active labour market policies is key to facilitating the reallocation of labour. Strengthening the governance of public investment spending and public procurement will help ensure timely and effective implementation of the recovery plan. A medium-fiscal consolidation strategy should be adopted to address medium‑term fiscal challenges, especially those related to rapid population ageing.