As those base-year effects fade, inflation will fall again, pulled down by the significant excess supply in the economy. As the economy absorbs this excess supply, we expect inflation to move up gradually and return sustainably to the 2 percent target in 2023. In sum, there is clear reason to be more optimistic about the direction of the economy over medium term.
Actions that promote employment, for instance through the development of local employment partnerships and vocational training programmes, will also be instrumental in tackling unemployment, especially its structural component. However, this strengthening of active policies needs to be combined with eligibility controls and results-based assessment of programmes and with a fight against undeclared and uninsured work. (g)  Effective management of non-performing loans (NPLs).