OECD 2012 Outlook

7/31/2019 OECD 2012 Outlook

1/22

1

What is the economic outlook forOECD countries?

Paris, 22 May 201210h Paris time

Angel Gurra

Secretary-General&

Pier Carlo PadoanDeputy Secretary-General and Chief Economist


2/22

2

The outlook

T

heoutlook

2010 2011 2012 2013

United States 3.0 1.7 2.4 2.6

Euro area 1.9 1.5 -0.1 0.9

Japan 4.5 -0.7 2.0 1.5

Total OECD 3.2 1.8 1.6 2.2

Source: OECD Economic Outlook 91 database.

Brazil 7.6 2.7 3.2 4.2

China 10.4 9.2 8.2 9.3

India 10.6 7.3 7.1 7.7

Indonesia 6.2 6.5 5.8 6.0

Russian Federation 4.3 4.3 4.5 4.1

South Africa 2.9 3.1 3.3 4.2

Real GDP growth, in per cent


3/22

3

Growth outlook different across regions

T

heoutlook


Annualised quarterly real GDP growth, in per cent

-20

-15

-10

-5

0

5

10

-20

-15

-10

-5

0

5

10

2008 2009 2010 2011 2012 2013

United States

Euro area

Japan


4/22

4

Moderate pickup in world trade

W

orldtrade

Source: CPB.

CPB indicator of world merchandise trade, 2001 = 100

90

100

110

120

130

140

150

160

170

180

90

100

110

120

130

140

150

160

170

180

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


5/22

5

World growth sustained by emerging

economies

W

orldgrowth

Note: Calculated using moving nominal GDP weights, based on national GDP at purchasing power parities.Source: OECD Economic Outlook 91 database.

Contribution to annualised quarterly world real GDP growth, percentage points

-8

-6

-4

-2

0

2

4

6

8

-8

-6

-4

-2

0

2

4

6

8

2007 2008 2009 2010 2011 2012 2013

Non-OECD

OECD


6/22

6

Unemployment rates are diverging

Un

employment


Unemployment rate, percentage of labour force

2

3

4

5

6

7

8

9

10

11

12

2

3

4

5

6

7

8

9

10

11

12

2006 2007 2008 2009 2010 2011 2012 2013

United States

Euro area

Japan


7/227

Business confidence weak in euro area

Businessconfidence

Note: Values greater than 50 signify an improvement in economic activity.

Source: Markit Economics Limited.

Purchasing Managers Index (PMI) for manufacturing and services

United States Euro area

25

30

35

40

45

50

55

60

65

25

30

35

40

45

50

55

60

65

2008 2009 2010 2011 2012

Manufacturing

Non manufacturing

25

30

35

40

45

50

55

60

65

25

30

35

40

45

50

55

60

65

2008 2009 2010 2011 2012

Manufacturing

Services


8/228

Consumption has stagnated in euro area

Priva

teconsump

tion

Note: Private consumption volumes are indexed to 100 in the quarter in which they reached the lowest level

during the last three recessions. Zero on the horizontal axis corresponds to the quarter of these troughs.


Private consumption volumes, index 100 at cycle troughs

95

100

105

110

115

120

95

100

105

110

115

120

-4 -2 0 2 4 6 8 10 12 14 16 18

1980:Q2 trough

1991:Q1 trough

2009:Q2 trough

United States

95

100

105

110

115

120

95

100

105

110

115

120

-4 -2 0 2 4 6 8 10 12 14 16 18

1982:Q3 trough

1993:Q1 trough

2009:Q1 trough

Euro area


9/229

Lending to consumers is growing

robustly in the United States

Lendingindicators

Note: Annualised monthly rate of change of seasonally adjusted stocks, in per cent. Euro area data are adjustedfor the impact of securitisation. Last observation: March 2012 Source: Datastream and ECB.

Annualised monthly percentage change

Total US consumer loans

-12

-6

0

6

12

18

-12

-6

0

6

12

18

2007 2008 2009 2010 2011 2012

-12

-6

0

6

12

18

-12

-6

0

6

12

18

2007 2008 2009 2010 2011 2012

Euro area bank loans to private sector


10/2210

Deleveraging has barely begun in the

euro area

Householddeleve

raging

Note: Data for USA and Japan are not consolidated. For 2011 Q3 data are growth rates (2010 end of year to

2011 Q3) of balance sheets published by US Federal Reserve, Bank of Japan, and ECB. Euro area 3 is Germany,

France and Italy. Source: OECD Annual National Accounts.

Household gross debt, percentage of net disposable income

70

80

90

100

110

120

130

140

150

70

80

90

100

110

120

130

140

150

1995 1997 1999 2001 2003 2005 2007 2009 2011

United States

Euro area 3

Japan


11/2211

Underlying inflation to remain moderate

Inflation

Note: United States - deflator of personal consumption expenditures (PCE) excluding food and energy; Euro

area - harmonised index of consumer prices (HICP) excluding food, energy, tobacco and alcohol; Japan -consumer price index (CPI) excluding food and energy. Source:OECD Economic Outlook 91 database.

Core inflation, 4-quarter percentage change

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

3

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

3

2007 2008 2009 2010 2011 2012 2013

United States

Euro area

Japan


12/2212

Monetary policy rates accommodative

Mone

tarypolicy

rates

Source: Datastream.

Policy interest rates, in per cent

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2008 2009 2010 2012

United States

Euro area

Japan


13/2213

Central bank balance sheets supportive

Centralb

ankbalanc

esheets

Source: Federal Reserve; Bank of Japan; and European Central Bank.

Central bank liabilities, local currency

500

1000

1500

2000

2500

3000

3500

500

1000

1500

2000

2500

3000

3500

2007 2008 2009 2010 2011 2012

United States (bn dollars)

Euro area (bn euros)

Japan (100 bn yens)


14/2214

Fiscal consolidation combines spending

reductions and tax increases

Fiscalconsolida

tion

Note: Total consolidation is the projected difference in the underlying primary balance; revenue side is the

projected increase in the underlying receipts excluding interest earned on financial assets; and spending side

is the projected decline in the underlying primary spending excluding interest payments on debt.

Source: OECD Economic Outlook 91 database; and OECD calculations.

Change in the underlying primary balance 2011-13,

in per cent of potential GDP

-1

0

1

2

3

4

5

6

7

8

-1

0

1

2

3

4

5

6

7

8

ESP

PRT

RC S

IT

S

IRL

P

L

SK

L

FR

S

BEL

BR Z

E ZL R

ISL

C

T

FI

S

E

K

RISR

EST

L

JP

E

E

D

K

Revenue side

Spending side

Total consolidation


15/2215

Government debt sustainability remains

a long-term challenge

Governme

ntdebtsus

tainability

Note: See OECD Economic Outlook 91 for methodology. The bars show the average improvement in the

underlying primary balance between 2011 and 2030 necessary to either stabilise government debt ratios or bring

them down to 60% of GDP. In Japans case, the average consolidation shown would be sufficient to stabilise thedebt ratio but only after 2030. Source: OECD Economic Outlook 91 long-term database.

Average increase in the underlying primary balance from

2011 to 2030, in percentage points of GDP

-2

0

2

4

6

8

10

12

14

16

-2

0

2

4

6

8

10

12

14

16

JP

R

PRT

S

ESP

BR

IRL

P

L

S

S

E

ZL S

ZE

LI

FR

IT

E15

ISL

L

EST

ISR

BEL

S

E R T E

E

Debt stabilisation

Debt ratio to 60%


16/2216

Rebalancing underway in euro area

Euroarearebalancing


Changes in domestic demand and trade balances, 2009-13

GRC

PRT

IRLESP

SVN

ITA

NLD

SVK

FRA

BEL

AUT

DEUFIN

LUX

-25

-20

-15

-10

-5

0

5

10

15

20

-6 -4 -2 0 2 4 6 8 10 12

Change in merchandise trade balance between 2009 and 2013 (% of GDP)

Cumulativech

angeindomesticdemand

between2009and2013(%)


17/2217

Unit labour costs have begun to adjust

Unitlabourco

sts

Source:OECD Economic Outlook 91 database.

Unit labour cost, 1999 = 100

100

110

120

130

140

150

160

100

110

120

130

140

150

160

GRC IRL ESP ITA PRT NLD FIN BEL FRA AUT DEU

2009 2013


18/2218

Euro area policy compact

Eu

roareapolicy

Goals

Avoid downside scenario

Create conditions for sustained growth

Strengthen monetary union

This requires National policies

European policies


19/22

19

Euro area policy compact

national policies

Eu

roareapolicy

Pro-growth structural reforms

Boost growth through productivity and employment

Strengthen competitiveness

Protect weak segments of population

Contribute to current account rebalancing

Wage adjustment in deficit and surplus countries

Growth friendly fiscal consolidation

Medium term plans

Composition of spending cuts and revenues

Financial system repair

Transparency in balance sheet assessment

Recapitalise viable banks

Reforms have already started in many countries.

Benefits could materialise earlier than expected.


20/22

20

Large potential gains from a broad

package of reforms

Gainsfromreform

Note: Estimated cumulative GDP impact from reforms specified in Bouis and Duval (2011). The coverage of

reforms varies across countries, partly because of data coverage issues. This figure therefore does not show a

ranking across countries but possible effects from structural reforms.Source

: R. Bouis and R. Duval (2011),OECD Economics Department Working Papers, No. 835.

Overall GDP per capita gains over 10-year horizon, in per cent

0

2

4

6

8

10

12

14

16

18

20

0

2

4

6

8

10

12

14

16

18

20

IRL LUX NLD DEU FIN PRT ITA ESP FRA AUT GRC BEL


21/22

21

Euro area policy compact EU policies

Eu

roareapolicy

Firewall

Has been strengthened Could be enhanced

Fiscal compact

Implementation, transparency, communication

Growth Single Market can deliver (much) more

Innovation can be boosted (EU patent)

EIB lending, infrastructure investment

Jointly guaranteed bonds Redirect structural funds

European Central Bank

Balance sheet could be used more broadly

Interest rate can be lowered


22/22

22

What is the economic outlook forOECD countries?

Paris, 22 May 2012

10h Paris time

Angel Gurra

Secretary-General&

Pier Carlo PadoanDeputy Secretary-General and Chief Economist

Documents

OECD 2012 Outlook