GDP is projected to grow by 5.0% in 2025, 4.4% in 2026 and 4.1% in 2027, supported by resilient domestic demand. Private consumption is expected to remain robust, underpinned by favourable labour market conditions and income support policies. Investment will gain momentum especially in technology-intensive sectors including semiconductors and green energy. External demand is set to weaken amid higher tariffs and significant policy uncertainty. Prolonged global trade tensions, especially higher taxes on semiconductors, are a key risk to the outlook. Inflation is contained but could rise amid strong wage growth.

Following the planned reduction in the fiscal deficit to 3.9% of GDP in 2025, continuous fiscal consolidation will be required to rebuild fiscal space and reduce public debt, including by mobilising more tax revenues and phasing out energy subsidies. Amid external headwinds to growth and contained inflation, the current mildly accommodative monetary policy stance should be maintained, while carefully monitoring emerging inflationary pressures. Structural reforms could boost growth by reducing regulatory barriers on product markets. These include administrative burdens, entry restrictions and price ceilings, which hamper competition and give rise to high compliance costs, especially for smaller firms.