OECD Economic Outlook

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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, government spending, 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 such as housing, and an extensive statistical annex with a wide variety of variables including general debt.
Also available in French, German
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OECD Economic Outlook, Volume 2015 Issue 1

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19 June 2015
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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. The Outlook puts forward a consistent set of projections for output, employment, prices, fiscal and current account balances.

Coverage is provided for all OECD member countries as well as for selected non-member countries. This issue includes a general assessment, chapters summarising developments and providing projections for each individual country, a special chapter on investment and a statistical annex.

Also available in French, German
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  • Editorial: The B-Minus World Economy: Investment is Key to Getting a Better Grade

    The economic recovery from the global financial and economic crisis that broke out in 2008 has been unusually weak. Global growth has consistently been slower than the average pace during the dozen or so years before the global financial crisis. The failure to achieve a stronger cyclical upswing has had very real costs in terms of foregone employment, stagnant living standards in advanced economies, less vigorous development in some emerging economies, and rising inequality nearly everywhere.

  • General Assessment of the Macroeconomic Situation

    Global growth is projected to strengthen in the course of 2015 and 2016, but will remain modest relative to the pre-crisis period and its global distribution will change from that in recent years. The acceleration is underpinned by very supportive monetary conditions, a slower pace of fiscal consolidation, financial repair and lower oil prices. Investment, a crucial component to the outlook, has yet to take off. The appreciation of the US dollar against most currencies has led to a significant realignment in exchange rates since mid-2014. The ensuing relative price effects are shifting global demand more toward Europe, Japan and some emerging market economies (EMEs). Growth in EMEs is slowing due to specific factors in China, Brazil and Russia and it could continue to be weak in the absence of structural reforms to undo bottlenecks.

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  • Expand / Collapse Hide / Show all Abstracts Developments in Individual OECD Countries and Selected Non-Member Economies

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    • Australia

      Growth is projected to dip to 2¼ per cent in 2015 but pick up to nearly 3% in 2016. Gathering momentum in consumption, non-resource investment and exports help the economy adjust and recover from the fall in commodity prices and unwinding resource-sector investment. Consumer price inflation has been dented by lower oil prices and will remain moderate due to economic slack.

    • Austria

      Economic growth will remain subdued in 2015, but will strengthen and reach 1.7% in 2016. Going forward, easing geopolitical tensions, strengthening external demand and the depreciation of the euro will support export growth. The pick-up in trade and historically low interest rates provide a good environment for investment to recover. The income-tax reform will boost private consumption.

    • Belgium

      The recovery is projected to gradually strengthen. Economic growth is expected to broaden with rising exports and business investment owing to supportive financial conditions and improving external demand. Household consumption growth will be held back by fiscal consolidation and wage restraint. Inflation will pick up somewhat in 2016 as the effects of falling oil prices wears off.

    • Brazil

      The economy is projected to contract this year, but a slow recovery is expected to unfold gradually from the end of 2015, driven initially by strengthening exports, which will be boosted by the depreciation of the real.

    • Canada

      Growth is projected to slow to around 1½ per cent in 2015 before rebounding in 2016. The recent fall in oil prices has resulted in declines in related investment and GDP. However, substitution towards non-energy exports is underway, supported by the currency depreciation and stronger foreign-market growth. Non-oil related business investment should strengthen with a lag. Following recent weather-related weakness, consumption growth should pick up. With economic slack fully absorbed, inflation is projected to return to the 2% midpoint of the inflation target range by mid-2016.

    • Chile

      After a sharp slowdown in 2014 the economy is projected to gradually recover in 2015 and 2016. The pick-up in activity will initially be driven by higher public spending, but will increasingly be supported by stronger external demand for industrial goods from the United States and Europe.

    • China

      Growth is projected to continue to edge down, to 6.7% by 2016. Slowing real estate and business investment will be countered to some extent by stepped-up infrastructure investment. Consumption is set to remain robust. Urbanisation and the rapid expansion of service industries will generate employment and keep unemployment low. Enduring overcapacity in some heavy industries should keep producer price inflation negative and consumer price inflation low.

    • Colombia

      Economic growth will slow down in 2015 as weaker commodity prices reduce investment and exports, and public spending slows due to lower oil and mining revenues. Tighter household balance sheets and weaker employment growth will also slow domestic demand growth. Currency depreciation will temporarily raise headline inflation, but also contribute to growth by gradually boosting non-commodity exports. Stronger foreign demand and the easing of infrastructure bottlenecks will also contribute to an export-led recovery in 2016.

    • Czech Republic

      The economic expansion has gained momentum, driven by domestic demand. Renewed consumer confidence and income growth are supporting consumer spending, while public spending and an improving outlook are raising investment. Stronger growth in trading partners will drive further growth in exports. Global commodity price falls have temporarily reduced inflation but rising domestic cost pressures will push it towards the target during 2016.

    • Denmark

      Economic growth is projected to rise to 1.9% this year and 2.3% in 2016, thanks to improved trade prospects, a weaker effective exchange rate, lower energy prices and easing financial conditions. Improved confidence, recovering house prices and a savings surplus in the private sector will underpin gathering momentum in business investment and private consumption.

    • Estonia

      Economic growth is projected to strengthen gradually. Strong wage growth will fuel private consumption and investment will recover somewhat. Export growth will pick up only slowly, however, hampered by weak economic growth in some of Estonia’s main trading partners.

    • Euro Area

      Economic growth will gradually strengthen to 2¼ per cent by the end of 2016, supported by lower oil prices, the depreciation of the euro, improving financial conditions, additional stimulus from further monetary expansion and a pause in fiscal adjustment. However, unemployment will decline only gradually, to a rate of 10¼ per cent at end-2016. Inflation should edge up to around 1½ per cent as the effects of lower energy prices dissipate and monetary easing is stepped up. Risks are broadly balanced around the projections, although event risks surrounding renewed financial turmoil remain significant.

    • Finland

      Economic growth is projected to resume in 2015 after three years of contraction. Nevertheless, sluggish incomes and high unemployment will continue to weigh on private consumption and remaining spare capacity will delay investments. A pick-up in exports on the back of the global economic recovery and the weaker euro should progressively spill over to the domestic economy.

    • France

      Economic growth is projected to gain momentum in 2015 and 2016. Lower energy prices, improving financial conditions, slowing fiscal consolidation, strengthening external demand and a pro-competitive reform agenda should underpin an increase in consumption and export volumes. Stabilising energy prices and euro depreciation will raise the price level, although persistent and significant economic slack will continue to put downward pressure on inflation. However, weak business confidence is still weighing on investment, implying a delayed pick-up in hiring and only a marginal decline in unemployment.

    • Germany

      Economic growth is projected to strengthen, driven by both domestic and external demand. A robust labour market, low interest rates and low oil prices will underpin household spending, while the recovery of the euro area and the depreciation of the euro will boost exports. Business investment is expected to recover as capacity utilisation rises. The already low unemployment rate will fall further, while consumer price inflation is projected to rise in 2016. The current account surplus is projected to remain high.

    • Greece

      Economic growth in 2015 remains weak, as uncertainty related to the reform programme and deteriorating liquidity conditions have undermined business confidence and investment. In 2016, growth will gain momentum and unemployment will decline somewhat as exports and investment recover while reform momentum is renewed. Deflation will continue in 2015 due to the very large degree of slack in the economy.

    • Hungary

      Economic growth is projected to slow but remain fairly robust, and unemployment will decline somewhat further. As the effects of cheaper energy wane and the labour market tightens, inflation should gradually increase. In contrast to slowing internal demand, export growth will remain dynamic, which, with terms-of-trade gains, will widen the already large current account surplus.

    • Iceland

      The economy has entered its seventh year of economic growth, with a pick-up in private consumption and fixed investment and a boom in tourism. Large investments in energy-intensive projects and fiscal support for households will sustain growth in 2015 and 2016. Inflationary pressures will mount as the labour market tightens.

    • India

      Economic growth will remain high, supported by a revival in investment. The FY 2015-16 fiscal consolidation target has been relaxed to allow for increased infrastructure investment while structural reforms to improve the ease of doing business and the Make in India initiative should boost corporate investment. Export growth will be held back by the currency appreciation. The decline in oil prices will reduce pressures on the current account deficit, inflation and subsidies.

    • Indonesia

      Economic growth has weakened in recent quarters, but activity is projected to pick up later in 2015 and strengthen further in 2016, as public spending gathers pace, confidence recovers and the expansionary impact of the depreciation of the rupiah takes hold. After spiking, following the removal of fuel subsidies, inflation is now moderating, in large part because of the fall in energy prices. Inflation is likely to stay high, as the recent currency weakness offsets lower energy prices. The exchange rate may remain fragile as the external imbalance persists.

    • Ireland

      Economic growth is projected to be robust and broadly based in 2015 and 2016. Exports will continue to be strong due to increasing demand in trading partners and the depreciation of the euro. Household consumption will gather pace with employment and wages rising steadily and with low energy prices.

    • Israel

      Economic growthslowed in 2014, picked up strongly at the end of the year and should strengthen to around 3.5% in 2015 and 2016, helping to keep unemployment low. Lower oil prices, further cuts in interest rates and a significant revaluation of the minimum wage should shore up domestic demand, while the gradual improvement of the global economy boosts exports.

    • Italy

      After a long recession, the Italian economy has started its gradual recovery. Output is projected to grow by 0.6% in 2015 and by 1.5% in 2016. Exports will continue to support growth, but the recovery will broaden to private consumption. Sluggish private investment will be countered by rising public infrastructure spending. Economic growth will result in employment gains and lead to a decrease in the unemployment rate, which will still remain high. Consumer price and wage inflation will remain moderate due to persistently large economic slack.

    • Japan

      The economy has now rebounded from the contraction in the wake of the 2014 tax hike. Supported by the fall in oil prices and real wage gains, output growth is projected to reach ¾ per cent in 2015 and 1½ per cent in 2016. Export growth is projected to remain buoyant, reflecting the weaker yen and a gradual pick-up in world trade. Inflation, which has fallen close to zero, is projected to begin rising in the second half of 2015, reaching 1½ per cent by the end of 2016, while the unemployment rate continues to fall.

    • Korea

      Output growth is projected to slow to around 3% in 2015, reflecting sluggish private consumption in the context of high household debt and stagnant wages. Inflation has fallen to less than 1%, well below the target range of 2.5% to 3.5%, while weak domestic demand is boosting the current account surplus to around 7% of GDP. Lower oil prices are projected to support stronger consumption and investment, boosting output growth to 3½ per cent in 2016.

    • Latvia

      Growth is expected to improve only slightly in 2015, but more robustly in 2016. Exports will continue to be weakened by the severe recession in Russia, but this will be partly offset by the recovery in the euro area. Private consumption will remain strong, supported by further increases in household disposal income. However, the pick-up in investment will be delayed due to the regional geopolitical tensions and the resulting high level of uncertainty.

    • Luxembourg

      Growth is projected to remain robust at just below 3%, notwithstanding the shift in the EU VAT regime for e-commerce (which makes Luxembourg less attractive for certain export-oriented activities) and higher domestic VAT rates (introduced to partially offset the loss of revenue from e-commerce). Lower oil prices, a weaker euro and an ongoing recovery in the euro area will support exports and investment. The higher VAT will boost prices in 2015, and the backward-looking wage indexation could add to upward price pressures in 2016.

    • Mexico

      Mexico’s economic recovery is strengthening, led by US import demand for manufactures and a weaker currency. Real GDP is projected to grow by 2.9% in 2015 and 3.5% in 2016. Firming exports have finally allowed the rebound to gain speed, and investment has begun to regain lost ground. Notwithstanding lower oil prices, new tenders are attracting considerable interest in the wake of the recent energy-sector reforms. Wide-ranging reforms to competition, energy and market regulation have helped boost confidence while monetary policy has been supportive.

    • Netherlands

      Economic growth is projected to increase to 2% in 2015 and 2.2% in 2016. Real wage gains will support higher private consumption, while the improved business outlook and the ongoing recovery of the housing market will support investment. Exports are set to continue to increase steadily, boosted by the recovery in the European Union and the low value of the euro. Employment is set to rise significantly and the unemployment rate to fall gradually.

    • New Zealand

      Economic growth is projected to moderate as the fall in the terms of trade depresses domestic demand, the boost from the Canterbury rebuild wanes and immigration slows. Still, the unemployment rate should continue to edge down and wage gains to increase modestly. With economic slack fully absorbed, consumer price inflation is projected to rise to 1.8% by late 2016.

    • Norway

      Growth is projected to weaken in 2015 as the fall in oil prices dents petroleum sector activity and investment, with spillovers on the mainland economy. A gradual recovery in 2016 will be supported by firming business investment in non-oil activities and stronger external demand. The unemployment rate is expected to drift up to slightly above 4% and wage growth is set to moderate. Inflation will remain low given the economic slack.

    • Poland

      Output growth, supported by strengthening private consumption, is projected to continue to rise, reaching 3.7% in 2016. The labour market will make further progress, and exports will benefit from firmer international trade and faster growth in the euro area. Energy and food prices have started to turn around following sharp falls, and, after several months of deflation, consumer prices should gradually pick up again.

    • Portugal

      The recovery is projected to strengthen in 2015 on the back of strong external demand, a weaker euro and lower oil prices. After having contracted for three years, domestic demand has started to rise, and business investment is projected to pick up further in 2016. However, considerable economic slack will remain, as the unemployment rate will continue to fall only moderately.

    • Russian Federation

      GDP is projected to fall by around 3% in 2015, and to grow less than 1% in 2016. This weak turnaround is supported by the recovery of oil prices, better international relations achieved in the first half of 2015 and on the success of import substitution programmes. A spike in consumer price inflation, which has peaked at around 17%, resulted in a sharp fall in real wages, weighing on private consumption. The current account remains in surplus because lower revenues from oil and gas exports are more than offset by falling imports, which reflect weak domestic demand and sanctions.

    • Slovak Republic

      Economic growth is projected to accelerate further in 2015. Labour market performance will continue to improve and increasingly confident households should spend more out of rising real incomes. Export markets are set to recover, raising business sentiment and investment.

    • Slovenia

      Economic growth is projected to continue in 2015 due to strong exports and public investment in infrastructure, partly financed by EU funds. Fiscal consolidation, still high unemployment and corporate deleveraging will weigh on domestic demand. A decline in public investment will be a drag on growth in 2016, although private investment and consumption will gain some momentum. Inflation will remain low due to the large degree of slack.

    • South Africa

      Economic growth is slowly recovering reflecting stronger world trade and past depreciation of the rand. However, ongoing electricity shortages are slowing the economy. Exports will rely on manufacturing goods, as commodities remain depressed by low international prices. Infrastructure investment will contribute to growth, both by providing demand and by alleviating bottlenecks. As incomes increase and confidence slowly improves, private domestic demand is projected to pick up.

    • Spain

      Robust growth is projected over the next two years, driven by very supportive financial conditions, the depreciation of the euro, lower oil prices and strengthening trading partner growth. The fiscal stance is assumed to be mildly contractionary. Private consumption growth will be supported by rising employment and incomes, household tax cuts, and lower fuel prices and interest rates. Export growth will be underpinned by cost competitiveness gains, including from the depreciation of the euro, and stronger growth in Europe. Persistent slack will keep inflation low.

    • Sweden

      Private consumption and investment continue to grow briskly, while foreign trade will make a significant but modest contribution to growth. Unemployment is projected to recede only slowly, as integrating the substantial flow of immigrants takes time and labour force participation increases. Inflation is set to pick up gradually, as wages increase and the disinflationary effect of falling oil prices fades out.

    • Switzerland

      The economy has weakened thus far in 2015, but growth is projected to rise gradually into 2016 as the recent large exchange rate appreciation is absorbed. Private consumption should hold firm on the back of rising real wages and very favourable financial conditions, but exports and business investment will suffer. Lower oil prices combined with the higher Swiss franc are bringing inflation back into negative territory.

    • Turkey

      Growth weakened in early 2015, after a short-lived upturn in late 2014. The uncertainties associated with the forthcoming legislative elections and ongoing geopolitical tensions in the region are holding back investment and consumption spending. GDP growth is projected to pick up gradually over 2015 and 2016, after the wait and see attitudes of businesses and households dissipate, but to remain below potential.

    • United Kingdom

      Economic growth was strong in 2014 and is projected to continue at a solid pace in 2015 and 2016, boosted by domestic demand. The unemployment rate is projected to fall further towards 5%. As spare capacity wanes, inflation is expected to pick up towards the 2% inflation target. The current account deficit has widened to above 5% of GDP, notably as investment income has disappointed, but is projected to narrow gradually as the euro area continues to recover.

    • United States

      Output growth paused in early 2015, weighed down by the stronger dollar and adverse weather. Nonetheless, the labour market has continued to improve, as evidenced by job gains in the private sector and a falling unemployment rate. Supportive monetary conditions and lower energy prices should underpin a sustained pick-up in aggregate demand as the fiscal policy drag dissipates and ongoing increases in household wealth lift consumer spending and residential construction.

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  • Lifting Investment for Higher Sustainable Growth

    Total OECD real investment, and in particular housing investment, dropped precipitously at the peak of the crisis and its recovery has been sluggish. Weak investment has depressed productivity growth and will, if it persists, entrench low equilibrium growth and poor job prospects in the short and longer term.

  • Statistical Annex

    This annex contains data on key economic series which provide a background to the recent economic developments in the OECD area described in the main body of this report. Data for 2015 to 2016 are OECD estimates and projections. The data in some of the tables have been adjusted to conform to internationally agreed concepts and definitions in order to make them more comparable across countries, as well as consistent with historical data shown in other OECD publications. Regional aggregates are based on weights that change each period, with the weights depending on the series considered. For details on aggregation, see OECD Economic Outlook Sources and Methods.

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