The unemployment rate is set to reach double digits. Sharply lower commodity prices and the large negative output gap will leave inflation at very low levels.
The fiscal position will deteriorate significantly in 2009 reflecting weaker economic conditions, lower revenues, and spending rises to support the economy. Fiscal consolidation and structural reforms will be required in the medium term to enhance growth prospects, reduce long-term unemployment and help place the public finances on a more sustainable footing.
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©OECD Observer No 274, July 2009