La Note de Synthèse de l'OCDE | Fiscal Policy | Euro

Please download to get full document.

View again

All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
 3
 
  PRESS BRIEFING ON THE ECONOMIC OUTLOOK AND POLICY REQUIREMENTS FOR G20 ECONOMIES Paris, 31 October 2011 11h00 Paris time Angel Gurría Secretary-General, OECD Summary The near-term outlook ã Uncertainties regarding the short-term economic outlook have risen dramatically in recent months. A number of events, notably related to the euro area debt crisis and fiscal policy in the United States, are likely to dominate economic developments in the coming two years. In an “events-free” scenario and
Share
Transcript
    PRESS BRIEFING ON THE ECONOMICOUTLOOK AND POLICY REQUIREMENTS FORG20 ECONOMIES   Paris, 31 October 201111h00 Paris time Angel Gurría Secretary-General, OECD  2 Summary The near-term outlook ã   Uncertainties regarding the short-term economic outlook have risen dramatically in recentmonths. A number of events, notably related to the euro area debt crisis and fiscal policy in theUnited States, are likely to dominate economic developments in the coming two years. In an“events-free” scenario and in the absence of comprehensive policy action to resolve currentproblems, real GDP is projected to grow by about 3.9% this year, 3.8% in 2012 and 4.6% in2013 on average in G20 countries. 1 This average masks a wide divergence among countrygroupings, and emerging-market economies are much more buoyant, despite some softening.In the euro area, a marked slowdown with patches of mild negative growth is likely. Growth isalso projected to remain weak in the United States, with a gradual pick-up from 2012 towards theend of the projection period. Unemployment is set to remain high in many advanced countries.   ã   A better upside scenario can materialise if the policy measures that were announced at the EuroSummit of 26 October are implemented promptly and forcefully. These measures go in the rightdirection and could help restore confidence and create positive feed-back effects that couldtrigger a scenario of stronger growth. ã   In contrast, the outlook would be gloomier if the commitments made by EU Leaders fail torestore confidence and a disorderly sovereign debt situation were to occur in the euro area withcontagion to other countries, and/or if fiscal policy turned out to be excessively tight in theUnited States. OECD analysis suggests that a deterioration of financial conditions of themagnitude observed during the global crisis (between the latter half of 2007 and the first quarterof 2009) could lead to a drop in the level of GDP in some of the major OECD economies of upto 5% by the first half of 2013. Appropriate policy responses ã   To resolve the euro area crisis, it is important to clarify and implement fully and decisively themeasures announced on 26 October to break the link between sovereign debt and bankingdistress, to deal with Greece, to ensure that the sovereign debt crisis does not spread to otherEuropean countries and to secure appropriate capitalisation and funding for banks. Detailedinformation is needed on how the package will be implemented. ã   In the advanced G20 economies, interest rates should remain on hold or, where possible, bereduced, notably in the euro area. Central banks should continue to provide ample liquidity toease financial market tensions. Further monetary relaxation, including through unconventionalmeasures, would be warranted if downside risks intensify. In the emerging-market economies,the stance of monetary policy should be guided by the outlook for growth and inflation, whichremains comparatively high. ã   Strong, credible medium-term frameworks for fiscal consolidation and durable growth areneeded to restore confidence in the longer-term sustainability of the public finances and to buildbudgetary space to deal with short-term economic weakness. Those advanced economies withsounder public finances can provide additional counter-cyclical support. ã   Structural reforms are essential to boost the growth potential of G20 countries, to tackle highunemployment and to rebalance global demand. In view of weak growth in the near term andimpaired fiscal positions in most advanced economies, priority should be given to reforms thatoffer comparatively strong short-term activity gains and facilitate longer-term fiscal consolidation. ã   In Cannes, G20 leaders will discuss an Action Plan with bold commitments for mutuallyreinforcing macroeconomic policies and structural reforms. In 2008, G20 leaders rose to thechallenge with a clear and coherent plan and we avoided a second Great Depression. Today,the adoption and implementation of the Action Plan is just as imperative to restore confidencethrough decisive actions in specific countries and regions. 1. The projections reported in this document are preliminary and will be updated in the OECD Economic Outlook  No. 90 to bereleased on 28 November 2011.  3 Summary of G20 projections 2010 2011 2012 2013Real GDP growth 5.2 3.9 3.8 4.6 Advanced G20 2.9 1.5 1.5 2.2United States 3.0 1.7 1.8 2.5Euro area 1.7 1.6 0.3 1.5Japan 4.0 -0.5 2.1 1.5Emerging-market G20 8.5 7.2 6.7 7.4China 10.4 9.3 8.6 9.5 Unemployment rate (Advanced G20) 8.4 8.1 8.2 8.0Government gross debt/GDP (Advanced G20) 102.3 106.1 110.6 113.8 United States 94.2 97.6 103.8 108.7Euro area 92.8 95.2 97.2 97.6Japan 200.0 212.3 219.8 227.6 Inflation 3.3 4.4 3.5 3.0 Advanced G20 1.5 2.7 1.8 1.3Emerging-market G20 5.8 6.5 5.5 5.0 Note  : The projections refer to averages across G20 countries. Countries are weighted using PPP-based nominal GDP,except for current account balances which use nominal US$ GDP weights and unemployment rates which use labour forceweights. The advanced G20 countries comprise Germany, Japan, Korea, Australia, Canada, France, Italy, the UnitedKingdom, the United States and Spain. The emerging-market G-20 countries comprise China, Indonesia, Russia, Brazil,India, Mexico, South Africa and Turkey. The euro area refers to the aggregate excluding Cyprus and Malta. Inflation refersto headline CPI and the harmonised measure is used for euro-area countries. GDP growth and inflation are defined in percent, the unemployment rate is defined in per cent of the labour force, and the government debt is defined in per cent ofGDP. Source  : OECD. Contributions to world GDP growth ( annualised quarterly, percentage points )   Note  : Calculated using moving nominal GDP weights, based on national GDP at purchasing power parities. Source  : OECD.  4 Current account balances   (in per cent of world GDP)   Note  : The vertical dotted line separates actual data from forecasts.1. Includes Azerbaijan, Kazakhstan, Turkmenistan, Brunei, Timor-Leste, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, RussianFederation, Saudi Arabia, United Arab Emirates, Yemen, Ecuador, Trinidad and Tobago, Venezuela, Algeria, Angola, Chad,Republic of Congo, Equatorial Guinea, Gabon, Nigeria and Sudan. Source  : OECD. 1 The outlook for the global economy Several factors, including heightened perceptions of risk and financial market turbulence, areexpected to weigh on the outlook for G20 economies. Business and consumer confidence have weakened,investment decisions are being postponed on the back of greater uncertainty, and household spending hascome under pressure from lower equity prices, labour market slack and persistent housing market weakness. Fiscal consolidation may be proceeding more rapidly than previously anticipated. In particular,in an “events-free” scenario and in the absence of comprehensive policy action to resolve current  problems, it is expected that: ã   Near-term GDP growth will remain subdued on average in the advanced G20 economies,including the United States, and buoyant but below-trend rates in the emerging-marketeconomies in general . A marked slowdown with patches of mild negative growth is likely in the euroarea. In the absence of decisive policy action to address current problems and steer clear of possiblenegative events, activity is projected to gather strength only gradually, as risk aversion dissipates andconfidence gradually recovers. ã   Inflation will likely peak and then weaken steadily . Substantial economic slack, together withweaker commodity prices and declining contributions from indirect tax hikes, will bear down oninflation in the advanced economies. However, expectations remain relatively well anchored, anddeflation does not appear to pose an immediate risk outside Japan. In the emerging-market economies,headline inflation has risen in the course of the year essentially due to high commodity and food prices,although these effects are expected to dissipate in the near term. ã   Due to slow growth, labour markets will begin to weaken once more, and unemployment willremain high in the advanced economies . Long-term joblessness has increased in many advancedeconomies, raising the risk that cyclical unemployment may become entrenched and that those workerswith weakest attachment to the labour force fall into inactivity.
Related Search
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks
SAVE OUR EARTH

We need your sign to support Project to invent "SMART AND CONTROLLABLE REFLECTIVE BALLOONS" to cover the Sun and Save Our Earth.

More details...

Sign Now!

We are very appreciated for your Prompt Action!

x