2003 OECD Economic Outlook, Volume 2003 Issue 2

image of OECD Economic Outlook, Volume 2003 Issue 2

This issue of the OECD Economic Outlook analyses the major trends that will mark the next two years. It  covers the outlook to the end of 2005 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. Three analytical chapters look at fiscal policy and its influence on economic activity, fiscal relations across levels of government, and  crubing the growth in government spending and raising its  cost effectiveness.

English Also available in: German, French


Demand has slowed considerably, reflecting weak export market growth and household and business caution. Growth prospects should brighten as the international situation improves and firms gain sufficient optimism to increase investment and hiring. Wage and price inflation pressures have eased as output has slipped below potential and are likely to remain contained over the projection period. A neutral fiscal stance, with automatic stabilisers working to cushion output fluctuations, remains appropriate. But the government’s strategy for managing public finances prudently could be put at risk if local government spending continues to slip. A faster pick-up in activity than projected could put upward pressure on wage inflation as the output gap closes. Further labour market reforms would not only help to address such risks but also reinforce the longer-term budget position...

English Also available in: French

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