Growth will rise to 4.5% in 2021 as the vaccine rollout accelerates, and remain strong at 4.4% in 2022. Additional fiscal policy support will boost growth in the second half of 2021 and preserve productive capacity, but will also raise public debt levels. Faster global growth will support the rebound in manufacturing, exports and investment, the latter also benefitting from higher public investment. Consumption will recover as mobility restrictions are lifted and employment growth resumes. High current levels of saving will come down gradually. New jobs, especially for the low-skilled, women and youth, return only in 2022.
The government’s budget seeks to promote greener, digitised and more inclusive growth, using Next Generation EU funds together with generous incentives for hiring and investment. Growth-enhancing structural reforms are set to accompany these efforts. Effective implementation of the national plan for recovery and resilience requires realising the announced ambition for a goal-oriented, digitised and agile public sector. Priorities are to implement public investment and civil justice reforms, reduce red tape and tax complexity, support competition, and increase the efficiency of training and job placement policies.