Until recently, the OECD area was enjoying a prolonged period of non-inflationary growth despite rising oil and commodity prices. Underlying these favourable trends, persistent wage moderation provided for both price stability and strongly rising profits as well as vigorous job creation in the main OECD regions.

Growth rates have become more similar across OECD regions. This is the outcome of the US economy slowing as the housing market corrects, the expansion in Japan continuing and the euro area upswing becoming self-sustained (Table I.1). Continued buoyancy in the emerging-market economies, a drop in oil prices from their recent highs and supportive conditions in financial markets should help to sustain the upswing across the OECD area. The US expansion is projected to gradually regain strength as excess supply in the auto and residential construction sectors is worked off. In the euro area domestic demand should maintain its recent momentum while Japan finally and durably exits from deflation as residual slack is being absorbed.

Over the past decade, household debt has risen to record levels in a number of OECD countries. The large size of these debt run-ups, coupled with, in several instances, changes in the characteristics of some of the relevant instruments, are estimated to have raised the sensitivity of the household sector to changes in interest rates, asset prices and incomes.1 In this sense, the household sector may have become more vulnerable to adverse shifts in these variables.

This annex contains data on some main economic series which are intended to provide a background to the recent economic developments in the OECD area described in the main body of this report. Data for 2006 to 2008 are OECD estimates and projections. The data on some of the tables have been adjusted to internationally agreed concepts and definitions in order to make them more comparable as between countries, as well as consistent with historical data shown in other OECD publications. Regional totals and sub totals are based on those countries in the table for which data are shown. Aggregate measures contained in the Annex, except the series for the euro area (see below), are computed on the basis of 2000 GDP weights expressed in 2000 purchasing power parities (see following page for weights). Aggregate measures for external trade and payments statistics, on the other hand, are based on current year exchange for values and base year exchange rates for volumes.

Global rebalancing is under way, as foreseen in the Economic Outlook published late last year. The US expansion has shifted into lower gear and the robustness of the recovery in Continental Europe has been confirmed. Meanwhile, growth in much of Asia is holding up well. Oil prices remain jittery but are much lower than half a year ago, contributing to easing inflationary pressures. Equity prices have been volatile in recent weeks, as was the case last Spring, but to some extent this may reflect a measure of normalisation in the pricing of risk. On the whole, financial conditions are still favourable...