Economic activity continued to solidify in early 2025, driven largely by robust goods exports, a recovery in services exports (particularly tourism receipts), and stronger private consumption. Economic performance remains uneven across sectors, however. The formal sector, particularly manufacturing exports, remains strong. In contrast, activity in the informal sector (especially retail and informal services) has lagged, as a result of the recent sharp deceleration in domestic credit growth and the ongoing housing market correction.

The uneven recovery, rising inflation, and mounting household debt have also weighed on real household disposable incomes, especially for poorer households that are more reliant on agriculture and services. Externally, rising risks include challenges from heightened policy uncertainty and adverse shifts in trade policy.