Emerging from the crisis

After a sharp fall during the recession, real GDP growth has picked up, but the recovery is expected to be relatively slow. The global crisis has hit the economy mainly through the collapse of world trade, the driving force behind the boom period before the crisis. The challenge going forward is to tackle the damage done by the crisis on the labour market and to public finances. Growth prior to the crisis was mainly export-driven and characterized by the build-up of a large current account surplus. Factors behind this surplus were a rise in corporate and government net lending amid continued high and increasing saving by households. A large part of the capital outflows reflected foreign investments by the banking system. Structural challenges going forward should focus on raising the stability of the banking sector and removing domestic barriers to higher growth.