GDP growth is projected to strengthen from 1.3% in 2023 to 2.6% in 2024 and 2.2% in 2025. Elevated debt servicing burdens and still‑above‑target inflation will continue to weigh on private consumption and investment in the short term, but domestic demand should recover in 2024. Exports will keep improving with robust semiconductor demand. Inflation will reach the target by the end of 2024, despite current food price pressures and rising energy prices. Employment is set to continue expanding, while unemployment will stabilise at a low level.
The monetary policy stance is appropriate, with easing expected from late 2024. Fiscal consolidation ought to proceed gradually by implementing the proposed fiscal rule. Boosting competition in the domestic market would help increase SME productivity. Further strengthening family policies and reducing labour market duality could increase fertility and female employment, while lengthening working lives. Allowing more immigrants to enter the country could offset some of the negative impacts of rapid ageing.