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.

English Also available in: German, French


Strong growth has resumed after a brief pause last autumn. The export sector is projected to remain robust, with business investment playing an increasing role. Household consumption will be supported by low interest rates, rising house prices and tax cuts. The continuing expansion should eventually deliver the long-awaited improvement in the job market. Inflation has been surprisingly low recently, but is likely to pick up as the impact of various temporary factors abates and spare capacity is used up.

Fiscal policy has been pushed off track by the expansionary measures in the recent autumn’s budget. The government will need to tighten policy again in order to achieve its target for the budget surplus. Meanwhile, the central bank can afford to keep interest rates on hold for some time yet, but it will need to raise interest rates as the output gap shrinks.

English Also available in: French

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