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, 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, and now available from Issue 1 from 1967 onwwards.

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OECD Economic Outlook, Volume 2013 Issue 2

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Publication Date :
19 Nov 2013
Pages :
9789264200951 (PDF) ; 9789264200975 (print)

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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 and a statistical annex.

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  • Expand / Collapse Hide / Show all Abstracts Developments in Individual OECD Countries

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    • Click to Access:  United States

      Economic growth has been modest in 2013 but will gather momentum in 2014 and 2015. The on-going fiscal contraction and low consumer and business confidence have been creating strong headwinds, but are assumed to diminish during 2014. Gradual labour market recovery, debt deleveraging and gains in asset prices will underpin consumption and residential investment growth. Easing credit conditions and ample corporate cash flow will support increasing business investment.

    • Click to Access:  Japan

      Japan’s recovery from its 2012 recession is being driven by strong export growth, consumer spending amid rising confidence and employment, and a rebound in business investment. The expansion, which is being supported by strong monetary stimulus and a fiscal package, is expected to continue. However, fiscal consolidation, including the consumption tax hikes in 2014 and 2015, is projected to slow output growth to around 1½ per cent in 2014 and 1% in 2015. The sustained recovery will help push inflation toward the 2% target.

    • Click to Access:  Euro Area

      Economic activity is projected to recover in 2014 and 2015 as confidence improves further, financial market fragmentation declines and fiscal consolidation eases. The pace will remain moderate though, with deleveraging, weak bank balance sheets and tight credit conditions bearing on economic activity, especially in the vulnerable countries. High unemployment and large margins of excess capacity will recede only slowly and inflation will therefore remain subdued.

    • Click to Access:  Germany

      Economic growth is projected to strengthen, supported by domestic demand. Real wage gains and low unemployment should sustain consumption growth while improving confidence in the euro area recovery and low interest rates are expected to boost investment spending. Exports will accelerate gradually as the recovery takes hold in the euro area and emerging market economies strengthen again. The current account surplus may shrink to 5½ per cent of GDP in 2015. The unemployment rate is projected to fall to 5% at the end of 2015, generating some inflation pressure.

    • Click to Access:  France

      Economic growth is projected to rise gradually from the trough in the level of real GDP reached in the first quarter of 2013 to about 1½ per cent in 2015, given less fiscal consolidation and improving economic prospects in the euro area. The national unemployment rate should stabilise slightly above 11% in 2014 before declining slowly. Despite VAT hikes, inflation pressure is likely to remain subdued.

    • Click to Access:  Italy

      Italy is exiting recession and growth is projected to rise through 2014-15 as fiscal consolidation eases. However, economic slack will remain large. The return to growth is supported by exports, which are projected to gain further momentum in the next two years as foreign demand accelerates. Domestic demand will gain momentum during 2014 as investment turns round. Unemployment is set to remain high as the impact of rising demand is likely to initially increase average working hours of persons already employed. Cost and price pressures will stay weak.

    • Click to Access:  United Kingdom

      Economic activity has picked up and broadened, supported by a turnaround in private sector confidence, continued monetary stimulus, a policy-induced recovery in the housing market and a more gradual pace of household and public sector deleveraging as automatic stabilisers operate. Growth is projected to strengthen further in 2014 and 2015, mainly supported by an upturn in gross fixed investment and exports. Despite exceeding the inflation target of 2%, headline inflation is projected to fall gradually in the next two years.

    • Click to Access:  Canada

      Growth is projected to strengthen through 2014 and 2015, led by exports and business investment. Improving exports result from the recovery in foreign markets and steps firms are taking to expand into the fastest-growing markets and enhance competitiveness, while business investment should be supported by declining spare capacity and cheap and readily available credit. Residential investment is likely to weaken since the housing stock seems greater than underlying demand. Projected growth should be enough to absorb the small degree of remaining excess capacity by end-2015, and the inflation rate should increase to near the 2% target rate.

    • Click to Access:  Australia

      Growth should remain moderate at 2½ per cent in 2014, before gradually accelerating toward its potential rate of 3% in 2015. The slower pace of mining investment should be offset by the gradual strengthening of non-mining sectors, which will benefit from recent improvements in confidence, the currently lower exchange rate and expansionary monetary policy.

    • Click to Access:  Austria

      GDP growth is set for a moderate but steady recovery. Export market growth is projected to pick up and it will spill over to private investment as confidence improves and financing conditions remain generally favourable. Private consumption remains subdued on account of slow employment growth, weak real incomes and on-going deleveraging, but will pick up towards the end of the projection period.

    • Click to Access:  Belgium

      Activity is gradually accelerating as world trade strengthens and monetary conditions remain supportive. However, fiscal consolidation, subdued household income growth and a weak housing market will all weigh on domestic demand. The unemployment rate will stabilise in the course of 2014 but, reflecting the sizeable output gap and wage moderation, underlying inflation will decline further.

    • Click to Access:  Chile

      After a period of strong economic growth, domestic demand, notably investment, is cooling and export markets remain weak. Consumer confidence and wage growth have started to trend down, though retail sales have been resilient so far. GDP growth is projected to fall below potential growth, but then pick up gradually to around 5% by 2015 as trading partners’ growth increases.

    • Click to Access:  Czech Republic

      An erratic export-led recovery started in early 2013, after six quarters of contraction. Growth is expected to gather pace in 2014, as fiscal consolidation will make a pause and external demand accelerates. The recovery will be sufficiently strong to gradually narrow the output gap, although unemployment will decrease only marginally due to an unwinding of labour hoarding.

    • Click to Access:  Denmark

      Growth is projected to continue to pick up as domestic demand, supported by low interest rates and improved confidence, gains momentum, and as exports accelerate on the back of strengthening external demand. Employment growth will gradually increase in 2014, contributing to a fall in the unemployment rate.

    • Click to Access:  Estonia

      Output fell in the first half of 2013 but growth is projected to pick up gradually, as wage growth and falling unemployment support private consumption. Headline inflation is expected to decline in 2014 as the impact of the liberalisation of subsidised electricity prices vanishes.

    • Click to Access:  Finland

      The economy is slowly coming out of recession. External demand is strengthening, although flat household purchasing power, weak consumer confidence and declining employment weigh on consumer spending. Growth will gather pace as the international environment brightens, pushing up exports, restoring confidence and eventually bolstering investment.

    • Click to Access:  Greece

      Growth is expected to turn positive in the course of 2014 and to strengthen in the following year as competitiveness improves further, world trade expands and investment rises. However, the required fiscal consolidation and weak bank balance sheets will restrain domestic demand. Very high unemployment will persist, keeping inflation negative.

    • Click to Access:  Hungary

      The on-going recovery is projected to continue, though at an uneven pace owing to deleveraging and supply-side impediments. While further cuts in administered energy prices will moderate headline inflation for a few quarters, inflation expectations are still above target, although they are declining, and cost pressures will tend to raise price pressures afterwards. Robust export growth throughout will lead to a rising current account surplus.

    • Click to Access:  Iceland

      The economy continues to recover, thanks to stronger consumer spending and tourism receipts. Declining unemployment and a foreign trade surplus are also signs of improvements. Growth is projected to increase as residential construction rebounds and investment in large energy-related projects picks up. As a result of this upswing, the slack in resource utilisation should be fully eliminated in 2015.

    • Click to Access:  Ireland

      Ireland is successfully emerging from its post-crisis adjustment programme. Economic activity is showing signs of revival and is projected to gradually strengthen in 2014-15. Growth will continue to be led by exports, with private consumption making a rising contribution. Business investment is also projected to expand, reflecting Ireland’s attractiveness for foreign direct investment. The unemployment rate will continue to decline, aided by the broadening of the recovery to more labour-intensive sectors.

    • Click to Access:  Israel

      Against a backdrop of steadily improving external demand, new offshore natural gas production will provide an additional boost to output growth. Fiscal consolidation will restrain domestic demand, particularly in 2014. Inflation is currently low, but relatively tight labour and product markets may soon bring some price pressures.

    • Click to Access:  Korea

      Output growth is projected to pick up to around 4% in 2014-15 despite headwinds from a high level of household debt and a weak property market. Stronger growth, led by a rebound in exports and business investment, is expected to boost inflation from around 1¼ per cent toward the midpoint of the central bank’s target range of 2.5% to 3.5%.

    • Click to Access:  Luxembourg

      Growth will continue to pick up in 2014 as the euro area gradually recovers and the pace of fiscal consolidation lessens. In 2015, growth and the unemployment rate are projected to stabilise even as the new EU VAT regime for e-commerce bears on competitiveness and a higher VAT rate slows demand. The wage indexation system could transmit the price effects of the VAT increase to wages.

    • Click to Access:  Mexico

      The economy slowed abruptly in the first half of 2013, principally due to the delayed effects of weak export demand spilling over to the rest of the economy, thereby hurting consumer and investor confidence. As external conditions improve and government expenditure is stepped up, growth should rebound in 2014 and 2015.

    • Click to Access:  Netherlands

      The Netherlands is in a protracted recession mainly owing to private and public sector deleveraging. Declining real house prices, falling real incomes and growing unemployment are holding back household consumption while overstretched balance sheets of banks and heightened risk have led to tight credit conditions. Sizeable fiscal retrenchment has further weakened activity. Growth is projected to resume only gradually, and inflation is expected to recede significantly owing to the substantial economic slack.

    • Click to Access:  New Zealand

      The economy is projected to expand as post-earthquake reconstruction drives robust investment and strengthening labour markets support consumption. A post-drought rebound in exports will be tempered by the sluggish global recovery and strong currency. Inflation is expected to rise as earthquake rebuilding stretches resources, pushing up costs.

    • Click to Access:  Norway

      The mainland economy is projected to expand robustly over the next two years, led by non-petroleum exports, while housing investment will slow. Consumption will remain solid on the back of sustained wage and employment growth. Inflation picked up recently, after having remained surprisingly low with respect to cost pressures, but it is not projected to exceed the central bank’s target.

    • Click to Access:  Poland

      GDP growth is projected to gain momentum with both exports and domestic demand strengthening over the projection period. Yet slack will hold inflation pressures down for some time before price increases rise to above 2 per cent in 2015.

    • Click to Access:  Portugal

      Against the background of on-going fiscal consolidation, the economy continued to contract in 2013. As global conditions improve and domestic demand recovers, growth should resume slowly, with marginally positive growth projected for 2014. Following recent improvements in the labour market, the unemployment rate is expected to continue a gradual decline throughout the forecasting horizon. As economic slack remains sizeable, inflation is set to remain very low. The current account has moved into surplus, reflecting in part improvements in competitiveness, but also very weak domestic demand.

    • Click to Access:  Slovak Republic

      Growth is projected to strengthen as higher export market growth boosts investment and exports, especially in the automotive industry. Private consumption will continue to grow, but is likely to face headwinds due to unfavourable conditions in a labour market characterised by high and persistent unemployment. Budgetary measures needed to reach a targeted fiscal deficit below 3% of GDP in 2014 will damp domestic demand.

    • Click to Access:  Slovenia

      GDP growth is projected to remain negative through 2014. Delays in bank resolution together with continuing fiscal consolidation and deleveraging by the over-indebted corporate sector will be a drag on demand. Domestic demand is expected to slowly pick up towards the end of 2015. Improving conditions in world markets will stimulate exports. Despite the recent rise in indirect taxes, inflation will remain subdued due to the large degree of slack. Indeed, unemployment is likely to rise further.

    • Click to Access:  Spain

      Improving growth in export markets, gains in market share and the stabilisation of private domestic demand will help to foster a weak recovery in 2014 and 2015. However, fiscal consolidation and tight credit conditions will remain a drag on growth. The unemployment rate is expected to peak in 2013 before gradually declining as growth picks up. Continued large economic slack will keep wage and price pressures subdued.

    • Click to Access:  Sweden

      The economy has lost momentum, but is set to recover gradually as world trade picks up and as stronger exports and improving business confidence spark a revival in business investment. The unemployment rate is projected to continue to fall, but with ample spare capacity inflation will remain subdued.

    • Click to Access:  Switzerland

      Economic growth is expected to pick up steadily as external demand starts supplementing domestic spending. Exit from deflation is proving protracted as a strong Swiss franc and only a slow take-up of economic slack are both holding down price pressures. Despite employment gains, unemployment is not projected to fall significantly until 2015.

    • Click to Access:  Turkey

      Growth strengthened in the first half of the year, driven by a surge in public infrastructure and robust private consumption. Since May, international capital market turbulence has pushed interest rates up and the exchange rate down. Financing and credit conditions nonetheless remain supportive and export growth should increase as global demand recovers. Growth is projected to pick up to around 4% in 2014 and 2015.

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  • Expand / Collapse Hide / Show all Abstracts Developments in Selected Non-member Economies

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    • Click to Access:  Brazil

      Economic growth has started to pick up on the back of stronger investment. Monthly inflation rates have been persistently above the mid-point of the inflation target, and inflationary pressures are likely to remain in place until the effects of tighter monetary policy are felt. Unemployment remains at record-low levels.

    • Click to Access:  China

      Growth is picking up and inflation remains low. Domestic demand has led the turnaround, aided by a small fiscal stimulus and rapid credit expansion that did not slacken until June 2013. By past standards though, the recovery is subdued, reflecting a marked slowing in potential growth in the past few years. The momentum of domestic demand is projected to help external rebalancing resume in 2014 but little change has occurred so far in the structure of domestic demand. Overall excess capacity is limited and shrinking. With a fairly neutral macroeconomic policy stance, growth is projected to peak in 2014 and then edge down to around 7.5% in 2015.

    • Click to Access:  India

      Economic activity is expected to recover gradually as the rupee depreciation supports exports, infrastructure projects cleared by the Cabinet Committee on Investment come on stream and political uncertainty declines after the general election due in the spring 2014. However, the rupee depreciation is putting pressures on inflation and the public finances, as well as on corporates and banks with high external debt exposure. Supply constraints will continue to restrain growth, adding to inflationary pressures and the current account deficit.

    • Click to Access:  Indonesia

      Both domestic and foreign demand have slowed. Inflation has risen, at least temporarily, as fuel subsidies have been cut. The current account has continued to deteriorate, due to weak trading-partner growth, declining terms of trade and structural impediments in a number of export sectors. The currency has depreciated sharply, with the rupiah at its lowest level since March 2009.

    • Click to Access:  Russian Federation

      Growth is projected to gradually strengthen, driven by higher infrastructure spending and, as the euro area recovers, stronger output, exports and investment in the mining sector. Consumption growth will remain solid as low unemployment fuels real wage growth. Strengthening domestic demand will be associated with a further decline in the current account surplus relative to GDP. Inflation is now falling due to the good harvest, but as economic growth picks up the pace of underlying disinflation will slow.

    • Click to Access:  South Africa

      The economy is projected to pick up as exports benefit from a weaker rand and strengthening world trade growth. Domestic demand is hampered by low confidence and slow income and employment growth, but should gradually pick up on the back of faster exports. Inflation is set to recede due to the substantial slack in the economy.

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  • Click to Access:  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 2012 to 2014 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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