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2002 OECD Economic Outlook, Volume 2002 Issue 2

image of OECD Economic Outlook, Volume 2002 Issue 2

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 detail.

In addition to the themes featured regularly, this issue contains four analytical chapters addressing the following important questions: the deterioration in budgetary positions in most OECD countries, raising the labour force participation of older workers,  the benefits that OECD countries could achieve from undertaking reforms to promote product market competition, and inflation rates in some of the larger, slow-growing economies have not declined sufficiently to offset higher rates elsewhere in the euro area.

English French, German

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Luxembourg

GDP is expected to grow at well below potential in 2002 for the second consecutive year, as this small and open economy specialised in financial services has been hard hit by the fall in asset prices and sluggish manufacturing activity in Europe. These adverse external shocks are cushioned to some extent by relatively robust domestic demand, which has been boosted by tax cuts and substantial increases in public investment. A pickup in external demand and stabilising financial market conditions should lead to a marked acceleration in growth as from the end of 2003.

As economic conditions improve, the government should seek to raise the cyclically-adjusted budget balance to be prepared for the fiscal impact of population ageing.

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