The financial crisis and continued subdued recovery have resulted in lower growth potential for most advanced countries, while many emerging-market economies are facing a slowdown. In the near term, policy challenges include persistently high unemployment, slowing productivity, high public-sector budget deficit and debt, as well as remaining fragilities in the financial sector. The crisis has also increased social distress, as lower‑income households were hit hard, with young people suffering the most severe income losses and facing increasing poverty risk. Longer-term challenges include coping with population ageing as well as with the effect of skill-biased technical change on income inequality and the impact of environmental degradation on health and future growth. Robust structural policies are needed to address many of the short- and medium-term challenges faced by both advanced and emerging-market countries.