OECD Economic Outlook, Volume 2010 Issue 2
The OECD Economic Outlook analyses the current economic situation and examines the economic policies required to foster a sustained recovery in member countries. This issue covers the outlook to end-2012 for both OECD countries and selected non-OECD economies. Together with a wide range of cross-country statistics, the Outlook provides a unique resource to keep abreast of world economic developments.
In addition to the themes featured regularly, this issue contains a special chapter entitled “Fiscal consolidation: Requirements, timing, instruments and institutional arrangements. It addresses the following questions: How much budget consolidation is required in individual OECD countries to stabilise the ratio of government debt to GDP and what are the requirements to bring gross debt ratios to 60% of GDP? What factors should determine the appropriate speed of consolidation? What instruments should be employed for consolidation and what kind of public spending should be cut and what kind of taxes should be raised? What fiscal rules and institutions are most likely to foster consolidation?
Italy
After one of the deepest recessions in the OECD area, Italy’s economy has begun a moderate recovery which will strengthen somewhat over the next two years. Investment and exports lead the upturn in demand. Unemployment may be near its peak, but as use of the Cassa Integrazione wage support schemes unwinds it may not fall very fast. Household income growth will remain sluggish and depend on a recovery in self-employment income, which dropped severely during the downturn. Consumer price inflation has picked up during the year but will remain subdued through 2012.