Economic activity is projected to rebound by 5.8% in 2021 and 4.0% in 2022. After a weak first half of 2021, activity will strengthen as the vaccine rollout accelerates and sanitary restrictions are lifted. In addition, the drawing down of the high level of saving due to the sanitary restrictions will boost consumption as pent-up demand is satisfied. Faster global growth will raise export prospects. Improving global demand, accommodative financing conditions and government capital spending in line with the recovery plan will support investment. Still, employment will recover slowly, as the participation in the job retention schemes will decline.
Temporary emergency measures and the medium-term recovery plan provide strong fiscal support for workers and firms. The gradual phasing-out of short-time work schemes and loan programmes for firms will encourage the reallocation of resources across firms. Some emergency support measures should remain in place, targeted towards firms directly impacted by containment measures. To ensure a gradual recovery, the vaccination campaign should continue to be accelerated. A rapid implementation of the recovery plan, notably green and digital investments, is also key.