2006 OECD Economic Outlook, Volume 2006 Issue 1

image of OECD Economic Outlook, Volume 2006 Issue 1
OECD's twice-yearly assessment of the major economic trends and policies in member countries and selected non-members. This issue covers the outlook to the end of 2007.  Together with a wide range of cross-country statistics, the Outlook provides a unique tool to keep abreast of world economic developments. This issue also contains a special chapter on Future Budget Pressures Arising from Spending on Health and Long-Term Care.

English Also available in: German, French


Activity rebounded in the second half of 2005 after the labour dispute in the forestry industry was resolved. Growth is expected to pick up to an average of around 3% this year and next, driven by household consumption and exports. Wage and price inflation will remain moderate, despite a positive output gap, because of the moderate central wage agreement in place until the end of 2007. Employment growth picked up strongly raising the probability that the government will reach its goal of increasing employment by 100 000 between 2003 and 2007, but it is less likely that the medium-term target of increasing the employment rate to 75% in 2011 will be reached. Achieving this target is important to mitigate the shock to both living standards and fiscal sustainability from rapid ageing. Further reforms to early retirement schemes and unemployment benefits are needed. Measures are required to raise productivity in the sheltered sectors of the economy.

English Also available in: French, German

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