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OUTLOOK

Country snapshots 2017-18 Extracts from OECD Economic Outlook No 100, November 2016. For full texts, order at www.oecd.org/bookshop or read at www.oecd-ilibrary.org

Australia The country snapshots in the following pages are extracted from OECD Economic Outlook No 100, November 2016. For details and updates, visit www.oecd.org/oecd economicoutlook Presenting the OECD’s twice-yearly view of the major economic trends and prospects for the next two years, the OECD Economic Outlook puts forward a consistent set of projections for output, employment, government spending, prices and current balances for over 40 countries. Each issue includes a general assessment, chapters summarising key developments, projections for individual countries, an extensive statistical annex of key economic data, charts, tables and more. The OECD Economic Outlook is available on i-Library at: http://www.oecd-ilibrary.org/economics/oecd-economicoutlook_16097408

Tax reform should be core Economic growth is projected to pick up to 3% by 2018. The decline in resource-sector investment will tail off and the non-resource sector will be supported by a steady increase in household consumption and investment as wages and employment rise. Further falls in unemployment will help reduce inequality and are not expected to generate strong inflationary pressures. Monetary policy tightening is expected to commence towards the end of 2017 and this is appropriate given likely monetarypolicy developments elsewhere, the cyclical development of the domestic economy and the need to unwind tensions from the low-interest environment, notably in the housing market, which has in many places experienced rising prices for some time. The government envisages fiscal consolidation. In the event of disappointing growth, however, fiscal rather than monetary support should play the leading role given the housing-market concerns and fiscal leeway. Tax reform should be a core element of structural policy.

GDP growth 2013

2016

Current prices AUD billion

1 555.6

2017

2018

% real change

2.7

2.6

3.1

Austria Solid job creation

Argentina Rebuilding confidence Economic growth is projected to rebound strongly in 2017 and 2018 as the impact of recent reforms and changes in economic policy start to gain traction. Inflation remains high but it will gradually decrease towards the central bank’s target owing to widening economic slack and as the effect of administrative price increases and past currency depreciation wear off. Stronger growth will reduce unemployment from its current rate of 8.5%. Rebuilding confidence in macroeconomic policies is a top priority. The reform of the national statistics agency has improved its credibility and enabled the central bank to introduce inflation targeting. Interest rates were increased sharply early in 2016 to contain inflationary and exchange rate pressures, but are slowly coming down as these tensions fade. Monetary policy remains restrictive, but it should loosen progressively as inflation declines.

2016

Current prices ARS billion

3 348.3

40

Easing restrictive entry regulations in retail trade and liberal professions would improve labour market prospects, including for migrants, and intensify competition, innovation and growth. Further consolidation of banks would improve cost efficiency, but care would have to be taken to avoid reductions in competition and the creation of institutions that are too big to fail. GDP growth 2013

2017

2018

% real change

-1.7

2.9

3.4

2016

Current prices EUR billion

322.4

GDP growth 2013

After four years of disappointing growth, economic activity picked up in 2016. It has been supported by a fiscal reform that boosted household disposable income, a catch-up of investment and solid job creation, especially among elderly, women and immigrants. These factors will continue to support growth in 2017 and, to a lesser extent, in 2018.

2017

2018

% real change

1.5

1.5

1.3

OECD Observer No 308 Q4 2016  
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