A rapid vaccine rollout and better global prospects are fuelling a strong recovery. Growth is projected to rebound to 6.7% in 2021 and 3.5% next year. Private consumption will be the main driver, sustained by policy measures to support households. Investment will slowly regain momentum on the back of higher copper prices, public investment, and supportive financing conditions. Inflation will pick up temporarily, driven by energy prices and supply constraints, and converge to the target of 3% later this year. Formal job creation will pick up gradually, supported by hiring subsidies.
Monetary and fiscal policy are providing ample support, made possible by prudent fiscal management in previous years. Planned reforms to bolster pension benefits and savings and female labour participation will promote inclusiveness. Strengthening the lifelong learning system and active labour market policies would foster the employment recovery and allow for a more rapid reallocation of resources. In addition, fostering investment in high-quality education, digital and transport infrastructure would help boosting growth.