Monetary policy will appropriately become more accommodative, as inflation is below the 3% target and economic slack widens. Fiscal policy will continue to be prudent, targeting a primary budget surplus of 1.0% this year and 0.7% in 2020. This strikes an appropriate balance between the need to stabilise debt and to safeguard social spending. Boosting tax collection, by strengthening tax administration and eliminating regressive exemptions, would create more space for infrastructure investment and social outlays. Establishing an independent fiscal council would reinforce the fiscal framework and improve transparency and accountability.
Stronger and more inclusive growth requires boosting productivity through reforms. Pursuing the fight against corruption, for example by reinforcing whistle-blower protection, would contribute to higher investment and public sector efficiency. Accelerating reform implementation in key policy areas, such as judicial reforms, is crucial to improve the business environment and achieve higher investment and growth. Granting competition authorities and sector regulators adequate resources to carry out their mandates would help to boost productivity and reduce prices, particularly benefiting low‑income households.
Informality has fallen slightly but it still affects 60% of employment. This calls for additional and coordinated efforts, such as reducing social security contributions for low‑wage workers or simplifying procedures for the registration of companies. Expanding early childhood education, and raising its quality, would improve school outcomes and allow more women to take up paid work. Continuing to reduce the duplication of social programmes would create space to expand their coverage.
