2003 OECD Economic Outlook, Volume 2003 Issue 1

image of OECD Economic Outlook, Volume 2003 Issue 1

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 addition to the themes featured regularly, this issue contains five analytical chapters addressing the following questions: the telecommunications sector,  sources of divergence in growth trends among the major economies, recent patterns and developments in foreign direct investment,  and whether further trade and regulatory policy reforms would affect foreign direct investment flows and economic integration among OECD countries.

English Also available in: French, German


Output came close to stagnating in 2002. While fixed investment fell further and private consumption contracted, this was counterbalanced by continuing, albeit weak, export growth. With domestic demand having firmed somewhat at the turn of the year, the trough of the downswing might have been reached. But the economy seems likely to grow very slowly through 2003, as consumption and investment remain subdued and a significant pickup in exports is unlikely before 2004. Unemployment is set to remain high. As the upswing broadens in 2004, GDP growth is projected to pick up to around 1¾ per cent, slightly above potential.

The general government deficit totalled 3.6 per cent of GDP in 2003 and -- based on current legislation -- will remain above three per cent in 2003. Coherent expenditure reforms are required to reduce the structural deficit and raise the growth path of the economy. Furthermore, the slowing of the economic expansion reinforces the need for fundamental reform to make labour markets more flexible and improve incentives for work. The government has announced important measures designed to tackle these issues, and these should be implemented as soon as possible.

English Also available in: French

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