Unemployment is projected to exceed 5% in 2010 and prices may decline towards the end of 2010.
With low capacity utilisation and a risk of deflation, policy interest rates should remain close to zero. Further fiscal stimulus would diminish the risk of deflation. To prevent persistent unemployment, measures should be taken to improve incentives for cantons to place the unemployed into jobs more GDP growth quickly and ensure a sufficient supply of apprenticeships.
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©OECD Observer No 274, July 2009