What is the economic outlook for OECD countries?<br />An interim assessment<br />Paris, 8th September 201111h00 Paris time...
Growth slowdown across major OECD and non-OECD economies<br />Growth slowdown<br />OECD majors GDP growthQuarterly GDP gro...
World trade is flat<br />CPB indicator of world tradeIndex: 2000 = 100<br />World trade<br />Source: Dutch Central Plannin...
Unemployment remains stubbornly high<br />Unemployment rate<br />In percent of labour force<br />Labour markets<br />Sourc...
Five causes of slowdown<br /><ul><li>Japan disaster global impact greater than expected
Commodity prices more damaging
Fiscal consolidation may have been faster than anticipated
Faster private sector balance sheet adjustment
Policy uncertainties</li></ul>Causes of slowdown<br />
Confidence has weakened<br />Business confidence<br />Consumer confidence<br />Confidence<br />Note: Manufacturing PMI. No...
Higher risk perceptions reflected in yields <br />Euro-area sovereign bond yieldsIn per cent<br />Corporate bond yieldsIn ...
The outlook<br />Annualised quarter-on-quarter GDP growth, in per cent<br />Interim Assessment<br />Weighted average of Ge...
Recent weakness is expected to continue for the next two quarters in most major OECD economies<br />Annualised quarter-on-...
Impact of Japan disaster is fading<br />Car production12-month percent change, number of units produced<br />Japan disaste...
Commodity prices remain high<br />Index: Jan 2000 = 100; US$ per barrel (Brent)<br />Commodity prices<br />Source: OECD Ma...
Equity prices have tumbled<br />Equity prices<br />Index: August 2008 = 100<br />Note:  United States: Wilshire 5000; Fran...
Policy imperative is to restore confidence:medium term<br />Medium-term policy imperatives<br /><ul><li>Fiscal consolidation
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OECD Economic Outlook Interim Assesment (8 September 2011)

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Economic recovery appears to have come close to a halt in the major industrialised economies, with falling household and business confidence affecting both world trade and employment, according to new analysis from the OECD. Growth remains strong in most emerging economies, albeit at a more moderate pace. More at www.oecd.org/oecdeconomicoutlook

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OECD Economic Outlook Interim Assesment (8 September 2011)

  1. 1. What is the economic outlook for OECD countries?<br />An interim assessment<br />Paris, 8th September 201111h00 Paris time<br />Pier Carlo Padoan<br />Chief Economist and Deputy Secretary-General<br />
  2. 2. Growth slowdown across major OECD and non-OECD economies<br />Growth slowdown<br />OECD majors GDP growthQuarterly GDP growth, annualised, in per cent<br />World GDP growthContributions to quarterly GDP growth, annualised, in per cent<br />Source: OECD Quarterly National Accounts database; and national sources.<br />
  3. 3. World trade is flat<br />CPB indicator of world tradeIndex: 2000 = 100<br />World trade<br />Source: Dutch Central Planning Bureau.<br />
  4. 4. Unemployment remains stubbornly high<br />Unemployment rate<br />In percent of labour force<br />Labour markets<br />Source: OECD Main Economic Indicators; and Eurostat.<br />
  5. 5. Five causes of slowdown<br /><ul><li>Japan disaster global impact greater than expected
  6. 6. Commodity prices more damaging
  7. 7. Fiscal consolidation may have been faster than anticipated
  8. 8. Faster private sector balance sheet adjustment
  9. 9. Policy uncertainties</li></ul>Causes of slowdown<br />
  10. 10. Confidence has weakened<br />Business confidence<br />Consumer confidence<br />Confidence<br />Note: Manufacturing PMI. Normalised and presented in units of standard deviation. Source: Markit.<br />Note: Normalised and presented in units of standard deviation. Source: OECD Main Economic Indicators; Japanese Cabinet Office.<br />
  11. 11. Higher risk perceptions reflected in yields <br />Euro-area sovereign bond yieldsIn per cent<br />Corporate bond yieldsIn per cent<br />Financial market confidence<br />Source: Datastream; and OECD Main Economic Indicators.<br />
  12. 12. The outlook<br />Annualised quarter-on-quarter GDP growth, in per cent<br />Interim Assessment<br />Weighted average of Germany, France and Italy.<br />Source: OECD, Quarterly National Accounts database; and OECD Indicator Model forecasts.<br />
  13. 13. Recent weakness is expected to continue for the next two quarters in most major OECD economies<br />Annualised quarter-on-quarter real GDP growth, in per cent<br />Interim Assessment<br />United States<br />Euro 3 (Germany, France and Italy)<br />* - EO89 projections1<br />1. Refers to OECD Economic Outlook No. 89 projections (published in May 2011).<br />Source: OECD, Quarterly National Accounts database; OECD Economic Outlook 89 database; and OECD Indicator Model forecasts.<br />
  14. 14. Impact of Japan disaster is fading<br />Car production12-month percent change, number of units produced<br />Japan disaster<br />Note: 2011Source: Toyota Motor Corporation and Honda Motor Co. Ltd monthly reports.<br />
  15. 15. Commodity prices remain high<br />Index: Jan 2000 = 100; US$ per barrel (Brent)<br />Commodity prices<br />Source: OECD Main Economic Indicators; and Datastream.<br />
  16. 16. Equity prices have tumbled<br />Equity prices<br />Index: August 2008 = 100<br />Note: United States: Wilshire 5000; France: CAC-40; Germany: DAX Index; Japan: Nikkei 225; United Kingdom: FTSE 100; China: Shanghai Composite Index.<br />Source: Datastream.<br />
  17. 17. Policy imperative is to restore confidence:medium term<br />Medium-term policy imperatives<br /><ul><li>Fiscal consolidation
  18. 18. Structural policies
  19. 19. Banking recapitalisation
  20. 20. Euro-area architecture</li></li></ul><li>Policy imperative is to restore confidence:short term<br />Short-term policy imperatives<br /><ul><li>Monetary policy
  21. 21. Fiscal policy
  22. 22. Exchange rate adjustment</li></li></ul><li>Room for monetary policy response in some economies<br />Monetary policy<br />Central bank policy ratespercentage points<br />Source: Federal Reserve; Bank of Japan; European Central Bank; Bank of England; Reserve Bank of India; and Central Bank of Brazil.<br />
  23. 23. Fiscal consolidation required is large <br />in many countries<br />Fiscal policy<br />Improvement in underlying primary balances percentage points of GDP<br />Note: Consolidation through 2011 and 2012 as projected in Economic Outlook 89; consolidation after 2012 assumed to be an additional ½ percentage points of GDP each year.<br />Source: OECD Economic Outlook 89 database; and OECD calculations.<br />
  24. 24. What is the economic outlook for OECD countries?<br />An interim assessment<br />Paris, 8th September 201111h00 Paris time<br />Pier Carlo Padoan<br />Chief Economist and Deputy Secretary-General<br />

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