Oecd Economic Outlook 2017.

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Table of contents Editorial: Global Economic Outlook: Better, but not good enough Chapter 1. General assessment of the macroeconomic situation Introduction Figure 1.1. GDP growth projections for the major economies The global economy has improved recently, but policy support is needed for a durable and sustainable recovery Figure 1.2. An upturn in investment has helped to boost industrial production growth Figure 1.3. Strong stimulus spending in China has helped to boost import growth this year Figure 1.4. Confidence has strengthened further, but its links with spending are unclear and policy uncertainty remains elevated Box 1.1. The usefulness of various cyclical indicators Correlations between cyclical hard and soft indicators Assessing year-on-year changes in GDP, investment and consumption using hard and soft indicators The timing of turning points in OECD cyclical indicators relative to OECD GDP, investment and consumption Box 1.2. Growth projections in the major economies A modest pick up in global growth is projected Figure 1.5. Global trade and investment intensity are set to increase Figure 1.6. Contributions to the growth of OECD and non-OECD import volumes Figure 1.7. Weaker supply growth is helping to narrow measured cyclical slack in the OECD economies Figure 1.8. Investment intensity is projected to improve in the OECD economies but capital stock growth is set to remain weak Figure 1.9. Surveys suggest that firms are likely to replace rather than expand capacity Figure 1.10. The global IT cycle points to a possible upturn in high-tech investment Imbalances and vulnerabilities remain and wage growth is still modest Figure 1.11. Underlying employment and participation rates have risen in many countries Box 1.3. Economic impact of asylum seekers in selected countries Asylum applications to selected countries by nationality and age Estimated fiscal costs associated with the wave of refugees and dynamics through time Labour market integration of asylum seekers in key receiving countries Figure 1.12. Wage growth remains weak despite declines in unemployment Box 1.4. Changes in the composition of employment and unemployment are affecting average wage growth High levels of involuntary part-time work add to cyclical slack in the OECD area The share of part-time employment is higher than before the crisis The proportion of unemployed for over one year is still above pre-crisis norms Figure 1.13. Minimum wage growth is picking up in some countries Figure 1.14. The impact of labour market slack on wage growth has declined in the OECD Figure 1.15. Changes in trade and technology are both associated with changes in labour shares in advanced economies Figure 1.16. Inflationary pressures in the OECD and emerging market economies are projected to remain modest Figure 1.17. The composition of global current account balances has changed Figure 1.18. Decomposition of changes in external balances Figure 1.19. Changes in export performance and import penetration seem not to respond strongly to changes in real effective exchange rates Figure 1.20. The share of negative-yield bonds in total outstanding government bonds remains high Box 1.5. The widening of TARGET2 imbalances TARGET2 balances have widened again Figure 1.21. Recent equity price gains have been driven by improved market sentiment Figure 1.22. Volatility has been low but perceptions of risks of large equity price declines have increased in the United States Figure 1.23. House prices, residential investment and mortgage debt Figure 1.24. Capital and liquidity ratios have improved in emerging market economies Figure 1.25. Outstanding private credit has declined in emerging market economies outside China Figure 1.26. Non-performing loans are rising in some emerging market economies Figure 1.27. China's linkages with the global economy have increased Figure 1.28. US-dollar denominated debt and export revenue Policies for sustained and inclusive growth Figure 1.29. Interest rates are expected to diverge among the main OECD areas Figure 1.30. Several central banks have become dominant holders of domestic government bonds Figure 1.31. The fiscal stance is expected to ease in many OECD countries Table 1.1. Effects of public spending reforms on growth and equity Figure 1.32. Many governments have reduced public investment since the crisis Box 1.6. The quality of public spending deteriorates during deep and long recessions The quality of public spending deteriorated in many countries during the crisis Spending mix changes typically amplify demand shocks Figure 1.33. The pace of structural reforms has declined further Figure 1.34. There is sizeable scope for new packages of labour and product market reforms Figure 1.35. Low entry barriers in product markets improve the effectiveness of ALMP spending Bibliography Annex A1. Policy and other assumptions underlying the projections Chapter 2. How to make trade work for all Figure 2.1. Income inequality has risen and manufacturing jobs have declined Box 2.1. Trade integration has risen The importance of emerging market economies in trade has risen over the past two decades Box 2.2. Main findings Trade, technology and tastes are all changing the structure of economies Figure 2.2. Evolution of jobs in manufacturing and services Figure 2.3. A portion of job losses in the manufacturing sector is related to domestic outsourcing and changes in consumption patterns Box 2.3. An accounting framework to assess the contribution of domestic and international factors to structural change Main determinants behind the manufacturing sector decline1 Figure 2.4. Explaining the decline in the manufacturing employment share in selected OECD countries Rising trade integration has strengthened competitive pressure and modified specialisation in advanced economies Figure 2.5. The comparative advantage of advanced economies has narrowed Figure 2.6. The evolution of goods trade specialisation Figure 2.7. Advanced OECD countries specialise in more complex products than emerging markets Figure 2.8. Business services trade is growing fast Adding up the gains: Global trade integration has increased efficiency and welfare Figure 2.9. Real income gains from trade for the median and lowest income deciles1 Box 2.4. The gains from trade Figure 2.10. Productivity gains and openness Figure 2.11. Global value chains have expanded markedly since 1990 Adding up the costs: Trade has accentuated technology-driven trends toward higher inequality Figure 2.12. Labour markets have polarised across occupations Figure 2.13. Wage dispersion is correlated with productivity dispersion Figure 2.14. Trade has contributed to a lower labour share Focusing on the costs: Regional adjustment to import competition, changing tastes and technology Figure 2.15. Employment in manufacturing is more regionally concentrated than in services Figure 2.16. The decline in manufacturing is associated with lower employment and lower wages Figure 2.17. A decline in manufacturing employment rates is associated with an increase in income inequality across regions Policies to boost regional resilience Figure 2.18. Correlation between the change in the regional total employment rate and the change in the net inter-regional immigration rate since 2000¹ Figure 2.19. Changes in regional employment in Europe are associated with greater integration in global value chains Policies to help workers Box 2.5. Trade-related labour market programmes: lessons from international experience Figure 2.20. Job security is low is some countries Figure 2.21. Education attainment and participation in training is low in some countries Bibliography Annex 2.1. Export growth regression results Export growth of manufactured products Annex 2.2. Manufacturing employment regression results Explaining the decline in the manufacturing employment share for selected OECD countries Annex 2.3. Regional analysis Chapter 3. Developments in individual OECD and selected non-member economies Argentina Australia Austria Belgium Brazil Canada Chile China Colombia Costa Rica Czech Republic Denmark Estonia Euro area Finland France Germany Greece Hungary Iceland India Indonesia Ireland Israel Italy Japan Korea Latvia Lithuania Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Russia Slovak Republic Slovenia South Africa Spain Sweden Switzerland Turkey United Kingdom United States Statistical Annex Annex Tables Annex Table 1. Real GDP Annex Table 2. Nominal GDP Annex Table 3. Real private consumption expenditure Annex Table 4. Real public consumption expenditure Annex Table 5. Real total gross fixed capital formation Annex Table 6. Real gross private non-residential fixed capital formation Annex Table 7. Real gross residential fixed capital formation Annex Table 8. Real total domestic demand Annex Table 9. Foreign balance contributions to changes in real GDP Annex Table 10. Quarterly demand and output projections Annex Table 11. Contributions to changes in real GDP in OECD countries Annex Table 12. Output gaps Annex Table 13. GDP deflators Annex Table 14. Private consumption deflators Annex Table 15. Consumer price indices Annex Table 16. Oil and other primary commodity markets Annex Table 17. Compensation per employee Annex Table 18. Labour productivity Annex Table 19. Employment and labour force Annex Table 20. Labour force, employment and unemployment Annex Table 21. Unemployment rates: national definitions Annex Table 22. Harmonised unemployment rates Annex Table 23. Quarterly price, cost and unemployment projections Annex Table 24. Potential GDP and productive capital stock Annex Table 25. Structural unemployment and unit labour costs Annex Table 26. Household saving rates Annex Table 27. Gross national saving Annex Table 28. Household wealth and indebtedness Annex Table 29. General government total outlays Annex Table 30. General government total tax and non-tax receipts Annex Table 31. General government financial balances Annex Table 32. General government cyclically-adjusted balances Annex Table 33. General government underlying balances Annex Table 34. General government underlying primary balances Annex Table 35. General government net debt interest payments Annex Table 36. General government gross financial liabilities Annex Table 37. General government net financial liabilities Annex Table 38. Maastricht definition of general government gross public debt Annex Table 39. Short-term interest rates Annex Table 40. Long-term interest rates Annex Table 41. Nominal exchange rates (vis-à-vis the US dollar) Annex Table 42. Effective exchange rates Annex Table 43. Nominal house prices Annex Table 44. Real house prices Annex Table 45. House price-to-rent ratio Annex Table 46. House price-to-income ratio Annex Table 47. Export volumes of goods and services Annex Table 48. Import volumes of goods and services Annex Table 49. Export prices of goods and services Annex Table 50. Import prices of goods and services Annex Table 51. Indicators of competitiveness based on relative consumer prices Annex Table 52. Indicators of competitiveness based on relative unit labour costs Annex Table 53. Export market growth in goods and services Annex Table 54. Export performance for total goods and services Annex Table 55. Import penetration Annex Table 56. Shares in world exports and imports Annex Table 57. Geographical structure of world trade growth Annex Table 58. Trade balances for goods and services Annex Table 59. Balance of primary income Annex Table 60. Balance of secondary income Annex Table 61. Current account balances Annex Table 62. Current account balances as a percentage of GDP Annex Table 63. Structure of current account balances of major world regions