Growth decelerated to 1.7 percent in 2023 from 4.2 percent in 2022 but has
proven resilient despite ongoing headwinds, such as spillovers from the war in Ukraine and
from the economic slowdown in Europe. Inflation has moderated from 17.4 percent in
October 2022 to 6 percent, on average, in 2023, but wage pressures linger due to
minimum wage increases and emigration. The fiscal balance deteriorated from a surplus of
0.9 percent in 2022 to a deficit of 1.7 percent in 2023, reflecting the accumulated impact of
several permanent increases in public wages and social benefits. Progress on structural
reforms remains limited, although EU accession talks appear to have sparked some reform
ambition.