OECD Economic Outlook

Frequency :
Semiannual
ISSN :
1609-7408 (online)
ISSN :
0474-5574 (print)
DOI :
10.1787/16097408
Next Edition: 22 May 2012
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The OECD Economic Outlook is the OECD’s twice-yearly analysis of the major economic trends and prospects for the next two years.  Prepared by the OECD Economics Department, the Outlook puts forward a consistent set of projections for output, employment, prices and current balances based on a review of each member country and of the induced effect on each of them on international developments. 

Coverage is provided for all OECD member countries as well as for selected non-member countries. Each issue includes a general assessment, chapters summarizing developments and providing projections for each individual country, three to five chapters on topics of current interest, and an extensive statistical annex. Subscribers to the print edition also have access to an online edition, published on internet six to eight weeks prior to the release of the print edition.

Also available in: French, German
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OECD Economic Outlook, Interim Report March 2009

OECD Economic Outlook, Interim Report March 2009 You do not have access to this content

Authors:
OECD
Publication Date :
31 Mar 2009
Pages :
150
ISBN :
9789264039315 (PDF)
DOI :
10.1787/eco_outlook-v2008-sup2-en

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This interim OECD Economic Outlook analyses the current crisis and examines the economic policies required to foster a sustained recovery in member countries. This issue covers the outlook to end-2010 for both OECD and major non‑OECD economies. A particular spotlight is put on fiscal policy in a special chapter entitled The Effectiveness and Scope of Fiscal Stimulus. It addresses the following issues: How  governments in OECD countries changed the stance of fiscal policy in response to the crisis and What is the scope for additional fiscal stimulus in OECD countries to cushion the recession and help the recovery.
Also available in: French, German

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  • Global Recession
    The world economy is in the midst of its deepest and most synchronised recession in our lifetimes, caused by a global financial crisis and deepened by a collapse in world trade. Tight financial conditions and low confidence are weighing on output and employment in OECD and non-OECD countries alike. In turn, shrinking activity and income is further undermining bank balance sheets, magnifying the downturn.
  • General Assessment of the Macroeconomic Situation
    The OECD economy is in the midst of its deepest and most widespread recession for more than 50 years (Table 1.1). Output has declined in almost all OECD countries in the past six months and with non-OECD countries slowing sharply, world growth has turned negative. Tight financial conditions and a generalised loss of confidence will continue to weigh on activity in the current year before a projected policy-induced recovery brings growth close to potential by end-2010. By that time, an exceptional degree of slack will have emerged in the OECD economy, with unemployment rates of above 10% in the United States and the euro area. This will push down inflation rates to close to zero in several countries, and some will experience falling price levels. 
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  • Expand / Collapse Hide / Show all Abstracts Developments in individual OECD countries and selected non-member economies

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    • Previous Editions
      United States
      The financial crisis has triggered a sharp recession, which is projected to deepen in 2009. With sizeable fiscal and monetary stimulus, growth is likely to resume in early 2010 but the pace of recovery will be curbed by substantial negative wealth effects and the ongoing, albeit diminishing, credit squeeze. Deflation is a distinct possibility at some point.
    • Previous Editions
      Japan
      The current downturn is projected to be the most severe in Japan’s post-war history. In the wake of the global financial crisis, exports and business investment have plummeted, while the yen has appreciated substantially and equity prices have fallen by half. Output is projected to decline by around 6½ per cent in 2009, raising unemployment and pushing Japan back into deflation. A recovery in domestic demand from mid-2010 is expected to lift output growth into positive territory, although well below potential.
    • Previous Editions
      Euro Area
      The euro area has entered a deep recession, propelled by very tight financial conditions, declining asset prices, a sharp drop in external demand and heightened uncertainty. Activity is expected to contract throughout 2009 and pick up only slowly in 2010, as the tensions in financial markets gradually dissipate. Rising unemployment and an increasingly negative output gap will dampen inflationary pressures throughout the projection period, with core inflation projected to fall to near zero during 2010.
    • Previous Editions
      Germany
      The fall in economic activity has accelerated substantially as the collapse in world trade is depressing growth particularly strongly in Germany. In 2009, real GDP is projected to fall by about 5%, before starting a slow recovery in 2010. Unemployment is projected to rise sharply in 2009 and further in 2010, and inflation will be low and falling throughout the projection horizon.
    • Previous Editions
      France
      Real GDP is projected to shrink by over 3% in 2009, with the pace of contraction gradually diminishing throughout the year. Improving credit conditions and policy stimulus at home and abroad will contribute to a recovery in 2010, although activity will remain subdued and fragile due to weak private-sector balance sheets. Inflation could fall to near zero by end-2010.
    • Previous Editions
      Italy
      The recession is projected to deepen in 2009 as investment falls sharply, export markets contract and uncertainty dampens consumer expenditure. Italy’s open economy and export product mix expose it to the full force of recession in other countries. The recovery is likely to be slow and unemployment will rise steeply this year and into 2010. Inflation will fall to near zero by the end of next year. The budget deficit will widen sharply reaching nearly 5% of GDP this year and 6% in 2010. 
    • Previous Editions
      United Kingdom
      Economic conditions are set to deteriorate further, with output projected to decline by 3.7% in 2009. Equity and property prices have tumbled, contributing to the erosion of financial sector balance sheets and impeding the supply of credit, thus restraining household and business spending. The government has introduced wide-ranging measures to address the financial sector, most recently providing substantive asset protection to address concerns about the value of assets on banks’ balance sheets. Monetary policy has eased dramatically and government borrowing is set to increase very significantly, reflecting a structural deterioration, the operation of automatic stabilisers and a discretionary fiscal stimulus of 1.4% of GDP, a large part of which was implemented quickly. These policy measures, the lower exchange rate and some improvement in the external environment should underpin a moderate recovery during 2010. The unemployment rate could rise to over 10%, while inflation is likely to stay well below the 2% target for an extended period. 
    • Previous Editions
      Canada
      The economic downturn that started in late 2007 through slowing exports turned into a full-fledged recession in the fourth quarter of 2008 as weakness spread and deepened in all sectors of the economy. Output, employment and inflation are all declining sharply. Slack is projected to grow and disinflationary pressures to continue over the entire projection period.
    • Previous Editions
      Brazil
      GDP is expected to shrink by a small margin in 2009. Activity lost considerable momentum in the last quarter of 2008, dragged down by a fall in industrial production, but may be showing signs of bottoming out. Ongoing policy easing, coupled with improvement in credit conditions, will buttress the recovery towards year-end and in 2010.
    • Previous Editions
      China
      Growth has slowed markedly in China, mainly owing to the sharp contraction in world trade. With a sizeable monetary and fiscal stimulus, activity is projected to pick up in the course of 2009 and 2010, although growth would remain below potential. In the process, some rebalancing towards domestic demand is projected to occur. Prices are expected to continue to decline as margins of slack widen.
    • Previous Editions
      India
      India’s long economic upswing has now ended, with GDP growth well below potential by late 2008. The government has recently introduced some limited fiscal measures, following a sizeable increase in public outlays in 2008. In 2009, falling exports are projected to offset continued expansion in domestic demand. With the gradual recovery of the global economy, growth is projected to pick up in 2010. 
    • Previous Editions
      Russian Federation
      Sharply lower oil prices sap domestic demand both directly and indirectly. GDP growth has been negative since summer 2008 and is projected to recover only weakly. Notwithstanding some passthrough of the exchange rate depreciation, inflation should fall in 2009-10. The budget will switch from large surpluses to even larger deficits, while the impact of lower commodity prices on exports will be partly offset by weaker imports, leaving the current account still in surplus. 
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  • The Effectiveness and Scope of Fiscal Stimulus
    Discretionary fiscal stimulus is playing an important role in OECD countries? policy response to boost demand in the wake of the financial crisis. This reflects the severity of the downturn, both in terms of depth and duration, combined with the limits of monetary policy, both because the room for additional interest rate cuts is becoming increasingly slim in many OECD countries and especially because monetary transmission channels may be impaired. 
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