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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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Sweden

A recovery is well underway in Sweden, although output growth has remained below its potential rate in 2002. Growth of around 2½ to 2¾ per cent in the next two years could close the output gap and turn it positive by 2004. Prospects are nevertheless sensitive to developments in the information and communications technology sector and in the labour supply, since an already tight labour market is generating inflation pressures.

Interest rates will need to be raised in 2003 as activity gains steam. Although the general government financial surplus remains substantial, greater efforts are needed to rein in the surge in expenditure on sickness benefits and disability pensions. Policies to increase effective labour supply would help to curb pressure on wages.

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