The OECD has just launched the 2nd issues of its Economic Outlook 2010. In addition to the themes featured regularly, this issue contains a special chapter entitled “Fiscal consolidation: Requirements, timing, instruments and institutional arrangements”.
According to the report, economic activity in OECD countries will gradually pick up steam over the coming two years, but the recovery will be uneven and unemployment will remain persistently high. The main challenge that governments have to face today is moving from a policy-driven recovery toward self-sustained growth.
Gross domestic product (GDP) across OECD countries is projected to rise by 2.3 percent in 2011 and 2.8 percent in 2012. In the US, activity is projected to rise by 2.2 percent in 2011 and then by 3.1 percent in 2012. Euro area growth is forecast at 1.7 percent in 2011 and 2 percent in 2012.
Meanwhile, in Spain output is expected to remain flat in the second half of 2010 and to grow by 1 percent in 2011 and by 1.75 per cent in 2012. The unemployment rate is projected to decline to 16.5 per cent by the end of 2012 while consumer price inflation may fall to below 0.5 percent once the effect of increased VAT rates has run its course.
The full text is available online for the IESE Community.