The COVID-19 outbreak is worsening an already fragile economic outlook. Since 2013, growth has been modest and unemployment has been rising. Policy uncertainty has been the main driver of low confidence and subdued investment. Following a sharp fiscal deterioration in recent years, the crisis also heightened debt sustainability challenges. Curbing the public sector wage bill, restructuring SOEs and containing spending growth in higher education are urgently needed to improve spending efficiency and restore fiscal sustainability. Supporting the economic recovery in the short-run while accelerating structural reforms to increase potential growth is key. In the medium term, developing tourism, boosting transport infrastructure investments, promoting renewable energies and strengthening the social protection system can contribute to more sustainable and inclusive growth.

SPECIAL FEATURE: SOCIAL PROTECTION AND TOURISM