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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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Ireland

Growth is projected to continue steadily at a rate of close to 5%. Domestic demand should expand rapidly as strong income growth continues and government spending provides additional impetus. Despite strong wage growth, inflation is projected to remain relatively muted, edging up to 2¾ per cent in 2006. At the same time, increasing unit labour costs weigh on competitiveness.

Strong wage pressures in some sheltered sectors, where regulations limit the scope for competition, could revive inflation. Further liberalisation in network industries, in retail distribution and in professional services would improve resource allocation and help curb the risk of renewed price and wage inflation.

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