After a 4.4% contraction in 2020, the economy is projected to expand by a moderate 1.5% in 2021 and by 3.8% in 2022. The introduction of lockdowns in neighbouring countries will significantly restrain exports in the fourth quarter of 2020, causing the economy to contract. GDP will start growing again in the first quarter of 2021. The recovery will gather pace in the following quarters on the back of more dynamic external demand and greater confidence of domestic consumers and firms due to a rollout of an effective vaccine. The unemployment rate is expected to peak at the beginning of 2021 at around 7.2% and to decline to 6.2% at the end of 2022. Risks to the projections are to the downside and include less favourable epidemiological developments, persistent labour market weakness, and increased distress in financial markets. On the upside, a faster disappearance of the pandemic, associated with efficient vaccine distribution, could lead to a stronger rebound in private consumption and investment.