03/08/2023
The economic recovery stalled in 2022 following a major COVID outbreak and U.S. monetary policy tightening, but the government effectively ramped up its fiscal policy support to about 8 percent of GDP to help mitigate the impact of the adverse shocks, while extending various financial relief measures. Economic challenges have broadened to labor markets with a large decline in the labor force over the last few years reflecting the combined impacts of structural factors such as population aging, and short-term factors related to the pandemic such as limited inflows of foreign workers. While slowing global growth and tighter financing conditions loom as headwinds for the economy, high frequency indicators suggest robust domestic recovery in the first quarter of 2023.
