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2005 OECD Economic Outlook, Volume 2005 Issue 1

image of OECD Economic Outlook, Volume 2005 Issue 1

Presents OECD's assessment of the economic outlook to the end of 2006 for the OECD area and China, Brazil, and the Russian Federation.  It finds that Japan and the US have rebounded but that Europe is lacking in sustained momentum, and it carefully examines why. This issue of the OECD Economic Outlook also includes several medium-term scenarios projecting to 2010. The special chapter covers measuring and assessing underlying inflation.

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Belgium

Economic growth is projected to slow to 1.3% in 2005 but to rise to 2.4% in 2006 as domestic demand and exports strengthen. Despite a pick up in employment growth in 2006, the unemployment rate should only ease back to around 8%. Headline inflation is likely to fall to 1.6% as the effects of higher energy prices pass, converging with the underlying rate.

Additional consolidation measures will be required to keep the budget in balance. In view of the economic costs of the already high tax burden, these should focus on expenditure restraint. Subsidies for early retirement should be progressively phased out to increase the employment rate for older workers.

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