While the GDP gap per capita relative to the upper half of OECD countries remains large, owing to relatively low productivity, its convergence towards high-income countries continues steadily.
Income inequality, as measured by the Gini coefficient, is well above the OECD average and has increased in recent years. The income share of the poor remains low. Per capita greenhouse gas emissions are below the OECD average.
The government increased the non-taxable income threshold and introduced more generous unemployment benefits under the New Social Model. Modernised curricula and other initiatives aim to enhance the labour-market relevance of vocational education and training system. Governance reforms have increased the independence of the boards of state-owned enterprises and introduced a better separation between operation and monitoring functions. In the health sector, the government has been promoting healthy lifestyles and granted pay rises for physicians in rural and remote areas to reduce regional differences. A reform underway in the reimbursement for drugs aims at incentivising the use of generic drugs. New provisions in 2017 helped reduce co-payments by around 20%.
Improved business-research collaboration on innovation and a more efficient insolvency regime that facilitates early restructuring, and where necessary, firm exit, would boost productivity growth. Further fostering inclusive growth hinges upon making the education system more responsive to skills needs and improving the employability of low-paid workers through lower social security contributions and more effective activation programmes.
