Following many years of a credit-fuelled expansion of the non-tradable sector and declining export performance, the financial crisis triggered a severe recession, leading to high unemployment and public debt. The authorities have been implementing a wideranging structural reform agenda, which is helping to rebalance the economy towards theexport sector. This is still work in progress, however. Public and private debt is high, translating into high external debt. Low expected inflation will create further challenges for debt reduction. Unemployment is falling, but it is still too high, and is a factor creating inequality and poverty. Against the background of a need to increase investment and alsoto reduce external debt, a sustained increase in exports will be key for creating jobs, and enhancing social inclusion.