Part 5/9:
A significant component of the projected recovery hinges on investment stabilization, particularly in the construction sector. Following a sharp decline since 2021, a modest recovery in construction and local government infrastructure investment is predicted, contributing anywhere between 0.5 to 1 percentage points to GDP growth.
The government’s spending strategy is likely to evolve as well. Promises of a more aggressive fiscal stance, targeting a 4% deficit for 2025, could provide an additional boost. However, this ambition is constrained by ongoing weaknesses in tax revenue and a sluggish industrial sector, with historical tax revenue sources continuing to decline.