Large growth stimulus

Click on the globe for Key Economic Forecast & Indicators

Output growth is projected to increase gradually, in line with the recovery in the euro area, allowing unemployment to fall in 2006. Notwithstanding progress in reducing the relatively high level of government spending, tax reductions in 2005 and 2006 will be mostly deficit-financed, providing a comparatively large stimulus to growth.
While the planned pension harmonisation will dampen ageing-related spending in the future, substantial further reductions in general government outlays will be needed to ensure the long-run sustainability of government finances, while further steps to improve incentives to work among older workers and women would help offset any adverse economic impact of ongoing demographic change.
Population (000s), 20038 067
Area (000 sq km)84
GDP (Billion USD), 2003253.1
Life expectancy at birth (Women, Men), 2002 81.7, 75.8
Total labour force (000s), 20033 967
Government typeFederal Republic
Indicators% change unless otherwise indicated
GDP growth1.82.32.6
Household savings ratio8.38.88.8
Consumer price index1.91.91.4
Short-term interest rate (%)
Unemployment rate (%)
General government financial balance (% GDP)-1.5-2.1-2.1
Current account balance (% GDP)-
Source: OECD© OECD Observer No 245, November 2004

Economic data


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