OECD Economic Outlook, Volume 2018 Issue 1

Table of contents......Page 5
Editorial: Stronger growth, but risks loom large......Page 9
Chapter 1. General assessment of the macroeconomic situation......Page 13
Table 1.1. Global growth is set to remain close to 4% in the next two years......Page 14
Policy support will help to sustain global growth......Page 15
Figure 1.1. Global activity indicators have eased recently from robust levels......Page 16
Figure 1.2. Global GDP growth is set to strengthen further in 2018-19......Page 17
Figure 1.3. Per capita income growth has picked up in the OECD economies......Page 18
Box 1.1. An assessment of the impact of US fiscal policy changes......Page 19
The US fiscal stimulus is set to strengthen short-term GDP growth......Page 20
Figure 1.4. A broad-based upturn in trade growth, but trade intensity remains lower than before the crisis......Page 21
Figure 1.6. Real wage growth is projected to pick up, helped by improving productivity growth......Page 22
Figure 1.7. There are high numbers of involuntary part-time and marginally attached workers in some countries......Page 23
Figure 1.9. Income and employment gains remain uneven in the OECD......Page 24
Figure 1.10. Inflation is projected to approach, or slightly exceed, inflation objective sin the main OECD areas......Page 25
Figure 1.12. Corporate expectations of selling prices have strengthened......Page 26
Figure 1.13. Large changes in inflation rates have frequently been driven by big changes in energy and food prices......Page 27
Figure 1.14. Survey evidence points to stronger investment intentions......Page 28
Figure 1.15. Global investment intensity has picked up......Page 29
Figure 1.16. The rate of return on fixed assets remains high in some countries......Page 30
Figure 1.17. Financial conditions have tightened in many large economies......Page 31
Figure 1.19. Private sector credit liabilities remain high in many large economies......Page 32
Figure 1.20. Banks in advanced economies are stronger......Page 33
Figure 1.21. Some emerging market economies are vulnerable to external shocks......Page 34
Figure 1.22. Risks for Chinese property developers are mounting......Page 35
Policy needs to focus on achieving a durable and inclusive improvement in living standards......Page 36
Figure 1.25. Net purchases of government bonds by the main central banks have declined......Page 37
Figure 1.26. Monetary policy is expected to remain very accommodative in the euro area and Japan......Page 38
Box 1.2. Modifications of, and alternatives to, current inflation targeting frameworks......Page 39
Figure 1.27. The fiscal stance is expected to ease in many OECD countries......Page 42
Figure 1.28. Fiscal buffers are projected to remain limited in a number of OECD countries......Page 43
Figure 1.29. The slow pace of structural reform is a risk to medium-term inclusive growth......Page 44
Progress in enacting reforms to improve education and skill acquisition has been modest......Page 45
Bibliography......Page 46
Annex A.1. Policy and other assumptions underlying the projections......Page 48
Chapter 2. Policy challenges from closer international trade and financial integration: dealing with economic shocks and spillovers......Page 51
Introduction and summary......Page 52
Figure 2.1. The role of emerging market economies in the global economy has been rising......Page 53
Figure 2.2. Trade intensity and ownership of foreign assets have increased......Page 54
Figure 2.3. World trade connections have been transformed......Page 55
Figure 2.4. Trade in value-added linkages......Page 56
Applied and bound tariff rates......Page 57
Figure 2.5. International financial assets and liabilities have expanded rapidly and their composition has changed......Page 59
Figure 2.6. Equity price gains largely explain rising external portfolio equity assets......Page 60
Figure 2.7. International banking integration has reversed, especially in Europe......Page 61
Figure 2.9. The importance of foreign direct investment has increased in the largest economies......Page 63
Figure 2.10. Global integration has been strengthened by rising flows of people and data......Page 64
Economic implications of greater global interconnectedness......Page 65
Figure 2.11. The role of global factors in driving macroeconomic variables has changed......Page 66
Figure 2.12. Non-resident ownership of domestic financial assets has been increasing in the main advanced economies......Page 67
Figure 2.13. Trade patterns and spillovers from a negative domestic demand shock in China......Page 70
Figure 2.14. Multipliers and spillovers from a collective public investment stimulus in the G7 economies......Page 73
Figure 2.15. Spillovers from a rise in the US equity risk premium......Page 74
Figure 2.16. Manufacturing supply chains have become complex......Page 76
Figure 2.17. The response in trade volumes to relative prices has declined......Page 77
Invoicing of exports and imports in US dollars and euros in 2016......Page 78
The US dollar dominates international finance¹......Page 79
Figure 2.18. Primary investment income flows are sizeable in advanced economies......Page 80
Policy implications of greater and changing interconnectedness......Page 81
Figure 2.20. Cumulative changes in financial policies......Page 83
Corporate income tax revenues in OECD countries......Page 86
Figure 2.21. Central banks in emerging market economies have accumulated large foreign exchange assets......Page 88
Figure 2.22. Trans-Governmental Networks have increased in number over the past three decades......Page 89
Bibliography......Page 90
Chapter 3. Developments in individual OECD and selected non-member economies......Page 95
Argentina......Page 96
Australia......Page 99
Austria......Page 102
Belgium......Page 105
Brazil......Page 108
Canada......Page 111
Chile......Page 115
China......Page 118
Colombia......Page 122
Costa Rica......Page 125
Czech Republic......Page 128
Denmark......Page 131
Estonia......Page 134
Euro area......Page 137
Finland......Page 141
France......Page 144
Germany......Page 148
Greece......Page 152
Hungary......Page 155
Iceland......Page 158
India......Page 160
Indonesia......Page 164
Ireland......Page 168
Israel......Page 171
Italy......Page 174
Japan......Page 177
Korea......Page 181
Latvia......Page 184
Lithuania......Page 187
Luxembourg......Page 190
Mexico......Page 193
Netherlands......Page 196
New Zealand......Page 199
Norway......Page 202
Poland......Page 205
Portugal......Page 208
Russia......Page 211
Slovak Republic......Page 214
Slovenia......Page 217
South Africa......Page 220
Spain......Page 223
Sweden......Page 226
Switzerland......Page 229
Turkey......Page 232
United Kingdom......Page 235
United States......Page 238
Statistical annex......Page 243
Irrevocable euro conversion rates......Page 245
National accounts reporting systems, base years and latest data updates......Page 246
Annex Tables......Page 249
Annex Table 1. Real GDP......Page 251
Annex Table 2. Nominal GDP......Page 252
Annex Table 3. Real private consumption expenditure......Page 253
Annex Table 4. Real public consumption expenditure......Page 254
Annex Table 5. Real total gross fixed capital formation......Page 255
Annex Table 6. Real gross private non-residential fixed capital formation......Page 256
Annex Table 7. Real gross residential fixed capital formation......Page 257
Annex Table 8. Real total domestic demand......Page 258
Annex Table 9. Foreign balance contributions to changes in real GDP......Page 259
Annex Table 10. Quarterly demand and output projections......Page 260
Annex Table 11. Contributions to changes in real GDP in OECD countries......Page 262
Annex Table 12. Output gaps......Page 264
Annex Table 13. GDP deflators......Page 265
Annex Table 14. Private consumption deflators......Page 266
Annex Table 15. Consumer price indices......Page 267
Annex Table 16. Oil and other primary commodity markets......Page 268
Annex Table 17. Compensation per employee......Page 269
Annex Table 18. Labour productivity......Page 270
Annex Table 19. Employment and labour force......Page 271
Annex Table 20. Labour force, employment and unemployment......Page 272
Annex Table 21. Unemployment rates: national definitions......Page 273
Annex Table 22. Harmonised unemployment rates......Page 274
Annex Table 23. Quarterly price, cost and unemployment projections......Page 275
Annex Table 24. Potential GDP and productive capital stock......Page 276
Annex Table 25. Structural unemployment and unit labour costs......Page 277
Annex Table 26. Household saving rates......Page 278
Annex Table 27. Gross national saving......Page 279
Annex Table 28. Household wealth and indebtedness......Page 280
Annex Table 29. General government total outlays......Page 281
Annex Table 30. General government total tax and non-tax receipts......Page 282
Annex Table 31. General government financial balances......Page 283
Annex Table 32. General government cyclically-adjusted balances......Page 284
Annex Table 33. General government underlying balances......Page 285
Annex Table 34. General government underlying primary balances......Page 286
Annex Table 35. General government net debt interest payments......Page 287
Annex Table 36. General government gross financial liabilities......Page 288
Annex Table 37. General government net financial liabilities......Page 289
Annex Table 38. Maastricht definition of general government gross public debt......Page 290
Annex Table 39. Short-term interest rates......Page 291
Annex Table 40. Long-term interest rates......Page 292
Annex Table 41. Nominal exchange rates (vis-à-vis the US dollar)......Page 293
Annex Table 42. Effective exchange rates......Page 294
Annex Table 43. Nominal house prices......Page 295
Annex Table 44. Real house prices......Page 296
Annex Table 45. House price-to-rent ratio......Page 297
Annex Table 46. House price-to-income ratio......Page 298
Annex Table 47. Export volumes of goods and services......Page 299
Annex Table 48. Import volumes of goods and services......Page 300
Annex Table 49. Export prices of goods and services......Page 301
Annex Table 50. Import prices of goods and services......Page 302
Annex Table 51. Indicators of competitiveness based on relative consumer prices......Page 303
Annex Table 52. Indicators of competitiveness based on relative unit labour costs......Page 304
Annex Table 53. Export market growth in goods and services......Page 305
Annex Table 54. Export performance for total goods and services......Page 306
Annex Table 55. Import penetration......Page 307
Annex Table 56. Shares in world exports and imports......Page 308
Annex Table 57. Geographical structure of world trade growth......Page 309
Annex Table 58. Trade balances for goods and services......Page 310
Annex Table 59. Balance of primary income......Page 311
Annex Table 60. Balance of secondary income......Page 312
Annex Table 61. Current account balances......Page 313
Annex Table 62. Current account balances as a percentage of GDP......Page 314
Annex Table 63. Structure of current account balances of major world regions......Page 315