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.
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OECD Economic Outlook, Volume 2017 Issue 2

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19 Dec 2017
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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, a special chapter on resilience in a time of high debt, a chapter summarising developments and providing projections for each individual country and a statistical annex.


Also available in French, German
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  • Editorial: The policy challenge: catalyse the private sector for stronger and more inclusive growth

    Global economic growth is strengthening, with incoming data surprising on the upside. We project global GDP growth to be between 3½ and 3¾ per cent through the projection horizon, closer to long-run averages. Will this synchronised momentum finally propel the global economy to gather enough speed to raise productivity, real wages, and living standards for all?

  • General assessment of the macroeconomic situation

    The global economy is now growing at its fastest pace since 2010, with the upturn becoming increasingly synchronised across countries. This long awaited lift to global growth, supported by policy stimulus, is being accompanied by solid employment gains, a moderate upturn in investment and a pick‑up in trade growth. Global GDP growth is projected to be just over 3½ per cent this year, strengthening further to 3¾ per cent in 2018 before easing slightly in 2019 (; ). On a per capita basis, growth is set to improve but fall short of pre-crisis norms in the majority of OECD and non-OECD economies. Inflation is currently subdued in the major economies and is set to remain moderate, although edging up gradually as resource pressures build.

  • Resilience in a time of high debt

    Indebtedness of households and non-financial corporations in many advanced and emerging market economies is high. In many countries, it is continuing to rise. Highly indebted countries may be vulnerable to financial and real shocks, and such indebtedness may undermine the sustainability of growth in the medium term. Finance supports economic activity and innovation, but it can also increase risks, lower growth, and raise inequality. Whilst indebtedness does not necessarily imply financial distress, it is prudent to scrutinise high indebtedness and changes in the composition of financial portfolios, particularly at a time of exceptionally low, but likely rising, interest rates.

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  • Expand / Collapse Hide / Show all Abstracts Developments in individual OECD and selected non-member economies

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    • Argentina

      Economic growth is projected to strengthen and become more broad-based. Inflation is falling, as monetary policy remains restrictive, raising households’ purchasing power and lifting consumer spending. Infrastructure outlays, improvements in the business environment and rising capital flows will boost investment. Exports will benefit from the recovery in Brazil. The labour market will improve gradually as the recovery picks up.

    • Australia

      The economy will continue growing at a robust pace. Business investment outside the housing and mining sectors will pick up, with exports boosted as new resource-sector capacity comes on stream. The strengthening labour market and household incomes will sustain private consumption, and inflation and wages will pick up gradually.

    • Austria

      Following strong rebounds in investment and exports, economic activity is set to remain buoyant through 2018 and, to a lesser extent, 2019. Unemployment will continue to decline and labour market participation will rise further, in particular for women and older workers. Inflation remains higher than in other euro area countries, mainly driven by prices in sectors that are little exposed to international trade.

    • Belgium

      Economic growth increased in 2017 and is projected to stabilise at 1.7% in 2018 and 2019. Private consumption will be an important driver of growth. Government investment will be strong in 2018 and private investment will support growth. Inflation will increase due to tightening labour markets and higher wages.

    • Brazil

      After falling for eight consecutive quarters, growth has finally resumed. Initially driven by agriculture, the recovery now appears increasingly broad-based. Growth is expected to strengthen further, although confidence will remain sensitive to political developments. Inflation has fallen to below the central bank’s target, raising real incomes and allowing lower interest rates, which will support a recovery of investment. Credit to the corporate sector is still falling, but unemployment has already started to decline.

    • Canada

      Strong economic growth in the first half of 2017 is set to ease in coming quarters. Growth has been led by household consumption, which should slow as rapid job growth and wealth effects from house price appreciation abate. Earlier robust export increases have weakened substantially, in part because of the stronger Canadian dollar. Consumer price inflation is expected to reach 2% in 2019, as remaining spare capacity is exhausted and exchange rate effects dissipate.

    • Chile

      GDP growth is projected to strengthen to around 3% in 2018-19, supported by improving external demand, a more accommodative monetary policy and mining investment. As exports and investment pick up, the labour market will strengthen, reducing income disparities and stimulating private consumption. Increasing aggregate demand and a stabilising exchange rate will bring back inflation towards target.

    • China

      Growth has strengthened somewhat in 2017, driven by services and some strategic industries, but is projected to soften in 2018-19, as exports decelerate. Industrial production growth has been picking up and profits have improved on the back of higher producer prices. The share of processing trade is declining but demand for services, in particular on account of tourism and foreign intellectual property, will remain high. Exports will slow somewhat but remain robust, making for a stable current account surplus. Infrastructure investment will also remain strong, notably to meet the targets of regional development initiatives. Housing investment will slow somewhat following a series of measures to restrict demand.

    • Colombia

      Economic growth is projected to rise to around 3% in 2018 and 2019. Reduced corporate taxation, the historic peace agreement, better financing conditions and new infrastructure projects will boost investment. Private consumption will gain momentum as the labour market strengthens. Increasing activity and a stable exchange rate will put an end to the inflation slowdown. Inequalities and informality will remain key social challenges.

    • Costa Rica

      Robust growth is projected to continue as export performance remains strong and investment is supported by FDI inflows and public infrastructure projects. However, domestic demand will be held back by the inflationary impact of the recent currency depreciation, increasing interest rates and fiscal consolidation. Past commodity price increases and the narrowing output gap have helped inflation increase to within the target range.

    • Czech Republic

      Strong growth will continue in 2018 and 2019, driven by robust private demand and a dynamic external sector. Increasing wages will support household consumption and low interest rates will boost capital investment. Labour shortages will weigh on growth. Historically low unemployment will push inflation above the central bank’s 2% target.

    • Denmark

      After reaching 2.2% in 2017, GDP growth is projected to return to a pace of 2% in 2018 and 2019, supported by robust domestic demand. Wages and inflation are expected to rise as labour resources become increasingly scarce.

    • Estonia

      After exceeding 4% in 2017, economic growth is projected to decline to 3% by 2019. Public and private investment should recover from past low levels, notably supported by resumed disbursement of EU funds. High wage growth, due to the tightening labour market, will sustain private consumption. While this poses a risk to competitiveness, export growth will remain strong.

    • Euro Area

      GDP growth is projected to remain strong, but ease to 1.9% in 2019, supported by the ongoing recovery of global output and trade, accommodative monetary policy and diminished political uncertainty. Growth is broad-based, driven by domestic and external demand. Wage growth is set to remain moderate, and inflation is projected to rise closer to, but still below, 2% by end-2019.

    • Finland

      Boosted by exports, output growth is on course to exceed 3% in 2017. Growth will remain strong in 2018-19 but will slow somewhat, as private consumption softens due to the impacts of wage moderation and rising inflation on household real incomes. Investment in construction is also set to decelerate, but export demand and the implementation of some major industrial projects will support business investment.

    • France

      Economic growth will remain robust at an annual pace of around 1¾ per cent in 2018‑19 thanks to stronger external demand, a rebound in tourism, robust business confidence and job creation. Cuts in business taxes and labour market reforms should further support investment and employment.

    • Germany

      Growth is projected to ease somewhat but still remain solid and employment is set to expand further. Stronger activity in the euro area is boosting exports and business investment, but euro appreciation and higher wages may dent competitiveness. Low unemployment and wage gains underpin private consumption, but are also raising consumer price inflation. Low interest rates and strong housing demand, partly due to immigration, sustain residential investment. The current account surplus will fall somewhat, but will still remain high.

    • Greece

      GDP growth is projected to rise to 2.3% in 2018, and then moderate to 2% in 2019. Private consumption and investment will lead the recovery, responding to reduced policy uncertainty and gradually improving financial conditions. Exports should continue to increase, supported by rising external demand. Accelerating imports will subtract from growth in 2019. Excess capacity is diminishing but remains exceptionally large, limiting price and wage pressures.

    • Hungary

      The recent strong economic performance is projected to continue into 2018, before softening somewhat in 2019. Investment remains a main driver with the resumed disbursement of EU structural funds and domestic and foreign firms responding to capacity constraints. Solid private consumption growth will be underpinned by continued strong real wage and employment increases. However, rising inflation is expected to harm cost competitiveness and increasingly constrain exports.

    • Iceland

      Growth will ease but remain robust; the economy is approaching capacity limits. Household consumption will increase on the back of continued labour immigration and rising wages in 2018 but slow down in 2019. Business investment will decline after completion of several large projects. Unemployment has reached its lowest level since the 2008-09 economic and financial crisis and will continue to fall slightly. After a strong 2017, revenues from exports and tourism will decline.

    • India

      Economic growth is projected to strengthen to above 7%, gradually recovering from the transitory adverse impact of rolling out the Goods and Services Tax (GST) and measures to choke off the black economy, including demonetisation. In the longer run, the GST will boost corporate investment, productivity and growth by creating a single market and reducing the cost of capital equipment. Investment will be further supported by the plan to recapitalise public banks and by the new road plan.

    • Indonesia

      GDP growth is projected to gradually pick up, underpinned by domestic demand. Rising household incomes will support private consumption. Public infrastructure investment is continuing to expand, and private investment will be boosted by easier monetary conditions and a more business-friendly regulatory environment. Exports will continue to benefit from the recent revival in regional trade. Inflation is projected to remain benign, partly reflecting low food price inflation.

    • Ireland

      The economy is projected to keep growing robustly, as domestic demand is set to remain solid. As the labour market tightens, wage pressures will continue to be strong and are projected to feed into higher inflation. Output is expected to expand at a slower pace than in past years due to already high labour costs and high external uncertainty, including about the final outcome of the Brexit negotiations.

    • Israel

      Economic growth is projected to strengthen to above 3¼ per cent in 2018 and 2019. Domestic demand will be supported by accommodative fiscal and monetary conditions, the development of new gas fields and higher wage increases due to the persistence of low unemployment. With the somewhat stronger external environment, exports are also picking up as the shekel has stabilised at least temporarily.

    • Italy

      GDP growth is projected to edge down to 1.5% in 2018 and 1.3% in 2019. Private consumption will continue to be the main driver of the recovery, which will continue to broaden to investment and exports. Employment gains will buttress household disposable income. Tax incentives and rising external demand will support business investment and export growth. Excess capacity is narrowing but consumer price inflation and wage pressures will remain muted.

    • Japan

      Growth is estimated to have picked up to 1.5% in 2017, aided by stronger international trade and fiscal stimulus. Although fiscal consolidation is set to resume in 2018, growth is projected to remain close to 1% in 2018 and 2019, as export growth remains robust. Employment is projected to peak in 2018 as the decline in the working-age population accelerates. Sustained above-potential growth will boost inflation to 1% in 2018 and around 1½ per cent in 2019 (excluding the impact of the increase in the consumption tax rate).

    • Korea

      The rebound in international trade and greater fiscal support are projected to sustain output growth at around 3% through 2019, even though construction investment is projected to slow following tighter regulations on housing and mortgage lending. High household debt and weak employment growth continue to hold back private consumption. Inflation is projected to remain close to 2%, while the current account surplus will edge up to 6% of GDP.

    • Latvia

      Economic growth is projected to remain strong and broad‑based. Exports are strengthening as prospects in EU countries and Russia are improving. Stronger exports and EU structural fund transfers are boosting investment. High wage growth will underpin household consumption. Unemployment is projected to fall only gradually due to skill and regional mismatches between workers and jobs. The current account deficit is projected to increase as strong domestic demand boosts imports.

    • Lithuania

      GDP growth is projected to be around 3% in 2018-19. Improving external demand and a turnaround in investment, on the back of increased EU fund disbursements, will support growth, even as the shrinking labour supply and skill shortages will constrain the supply side. The combination of strong demand and labour market tightening will push up inflation.

    • Luxembourg

      Growth is projected to strengthen significantly to 4% by 2019, boosted by dynamic domestic demand and growth in the domestic financial sector, which will foster exports. Wage growth, which is projected to pick up following automatic wage indexation at the beginning of the year, is a factor behind higher inflation. The unemployment rate is declining slowly, but, at around 6%, remains high, at least by Luxembourg standards.

    • Mexico

      Growth is holding up above 2% despite the uncertain environment, fiscal consolidation and tighter monetary conditions. The economy will rebalance, with a higher contribution of exports and investment to growth while private consumption will decelerate as high inflation dents purchasing power and credit expansion slows, owing to monetary policy tightening. Construction activity will pick up from its historically low levels, reflecting reconstruction after the September earthquakes. Recent structural reforms and successful tenders in the energy sector are expected to boost private investment.

    • Netherlands

      GDP growth is projected to remain strong and broad-based in 2018 and 2019. Private consumption growth will peak in 2018, reflecting a strong labour market and a looser fiscal stance, before moderating in 2019. Growth in business investment should be vibrant, driven by improved economic sentiment and solid external demand. Wage growth and inflation are projected to rise gradually. The current account surplus is set to ease gradually but remain at a high level.

    • New Zealand

      Economic growth should increase to over 3% in 2018-19, reflecting stronger investment and exports. Capacity constraints, high profitability, low financing costs, housing shortages and government demand should support investment, while agricultural exports should recover following adverse weather and temporary price weakness. Inflation is projected to rise to 2.4% by late 2019.

    • Norway

      Output growth in the mainland economy is projected to be sustained by the expansion of private consumption and investment, despite the slowdown in the housing market. Employment growth will further reduce the unemployment rate and consumer price inflation will gradually increase as the upturn in economic activity proceeds.

    • Poland

      GDP is estimated to have grown by over 4% in 2017 but is projected to slow somewhat in 2018-19. Domestic demand is driving growth, underpinned by rising social transfers, an increasingly tight labour market and an investment recovery led by faster disbursements of EU structural funds. Inflation will gradually increase in line with accelerating wages.

    • Portugal

      Economic growth is projected to remain above 2% in 2018 and 2019, driven by both domestic demand and exports. Consumption growth will remain solid in response to further declines in the unemployment rate and stronger wage growth. Investment will be supported by a pick-up in major export market growth and increased public investment. Increased exports will be matched by higher imports as a result of the pick-up in domestic demand, leaving the current account balance relatively unchanged.

    • Russia

      Economic growth is projected to continue its moderate pace. Assumed stable oil prices, better business sentiment and improved credit conditions will support investment and consumption. Unemployment will remain low, but inflation will decline further on the back of sluggish demand and low import prices. However, low productivity, a shrinking workforce, a relatively strong rouble and international sanctions weigh on the outlook. Income inequality and poverty remain high.

    • Slovak Republic

      The Slovak economy is maintaining its rapid expansion and growth is projected to exceed 4% in 2018 and 2019. Low interest rates and strong labour market outcomes will fuel consumer spending. Unemployment has already fallen to record lows, and intensifying labour shortages will boost wage growth. Investment should pick up, supported by an improving business climate and new infrastructure investment. Exports will continue to benefit from the expansion in the automotive sector, allowing the current account to reach a modest surplus. Tightening labour and product markets will push consumer price inflation above 2%.

    • Slovenia

      The strong and broad-based economic expansion is projected to moderate in 2018 and 2019, though with growth remaining above potential. Private consumption and housing investment will be supported by continued employment gains and faster real wage growth. Robust investment growth will decelerate as a new cycle of EU structural funds matures. Growth of exports, and imports of intermediary inputs, should ease as external competitiveness deteriorates due to the intensification of labour market tensions.

    • South Africa

      Economic growth is projected to pick up moderately in 2018-19, as stronger activity in trading partners boosts exports. Investment will support growth in 2019 on the assumption that business confidence increases and policy uncertainty fades. Despite persistently high unemployment, private consumption will expand as wages increase moderately and food prices stabilise.

    • Spain

      Economic growth has been strong and balanced in 2017, and is projected to moderate but remain robust in 2018 and 2019. Domestic demand will ease, as the support provided by low oil prices and lower taxes dissipates. On the other hand, political tensions in Catalonia have increased uncertainty. Competitiveness gains will continue to support exports, even as external demand growth declines slightly. Inflation is projected to fall to 1.3% in 2018, before bouncing back somewhat in 2019.

    • Sweden

      Low interest rates, a brightening global outlook and rapidly growing public spending are fuelling a booming economy. Growth is expected to remain solid over the coming years, albeit slowing somewhat as capacity constraints bite. The unemployment rate is levelling off as difficult‑to‑hire low-skilled workers make up a rising share of jobseekers. A lack of constructible land and pronounced labour shortages in the construction sector will slow residential investment.

    • Switzerland

      Economic activity is picking up after a weak 2017 outturn. An improving external environment and competitiveness gains will revive activity, raising export growth and invigorating investment. Domestic demand should provide additional stimulus as unemployment decreases and incomes rise. Inflation is projected to remain low given excess capacity. The large current account surplus will persist.

    • Turkey

      Economic growth is estimated to have exceeded 6% in 2017, driven by strong fiscal stimulus and an export market recovery, and is projected to edge down but to stay between 4½ and 5% in 2018 and 2019. Consumer price inflation remains far above the target and disinflation is projected to be slow.

    • United Kingdom

      Economic growth will continue to weaken in 2018 and 2019. Private consumption is projected to remain subdued as higher inflation, pushed up by the past depreciation of sterling, holds back household purchasing power. The unemployment rate is at a record low, but with slower growth this is unlikely to persist. Exchange rate depreciation should support exports, while import growth is projected to fall owing to weaker private consumption. An agreement about a transition period linked to the EU exit after March 2019 is assumed and should support growth in 2018 and in 2019, reducing the extent to which uncertainty weighs on domestic spending. Prospects of maintaining the closest possible economic relationship between the United Kingdom and the European Union would further support economic growth.

    • United States

      The economic expansion is projected to continue in 2018 and 2019. Buoyant asset prices and strong business and consumer confidence will support consumption and investment growth. The impact of slowing employment growth on consumption will be partly offset by wage growth acceleration as the labour market tightens further.

    • 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 2017 to 2019 are OECD estimates and projections. 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 time-varying weights. For details on aggregation, see OECD Economic Outlook Sources and Methods.

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