OECD Economic Outlook, Volume 2003 Issue 1
Twice a year, the OECD Economic Outlook analyses the major trends that will mark the next two years. The present issue covers the outlook to the end of 2004 and examines the economic policies required to foster high and sustainable growth in member countries. Developments in selected major non-OECD economies are also evaluated.
In addition to the themes featured regularly, this issue contains five analytical chapters addressing the following questions: the telecommunications sector, sources of divergence in growth trends among the major economies, recent patterns and developments in foreign direct investment, and whether further trade and regulatory policy reforms would affect foreign direct investment flows and economic integration among OECD countries.
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Italy
Growth continued to be sluggish in 2002 because of flagging domestic confidence and weak export performance. A recovery is expected to begin only in the second half of 2003 and to gather strength in 2004, driven by low real interest rates, reviving confidence, and accelerating world demand. Inflation, as measured by the Harmonised Index of Consumer Prices, is expected to decelerate, stabilising at 1¾ per cent by the end of 2004.
Labour market liberalisation and wage moderation underpin an ongoing structural shift towards more labour-intensive production, but greater wage differentiation is desirable to encourage further the demand for low-skill labour. More public expenditure restraint will be needed in both the short and medium term to reduce the high tax wedge, while also allowing for a satisfactory pace of debt reduction. Total factor productivity growth is low and strengthening it will require policies to promote product market competition and innovation.
Also available in: French
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