Inflation is expected to decline this year and next.

The delay in delivering fiscal stimulus aggravated the initial impact of the economic crisis; the budgeted increases in expenditure should now be implemented quickly, in particular for social protection and active labour market policies. Any windfalls in oil revenues relative to budget assumptions should, however, be saved. More public assistance may be needed for banks as non-performing loans rise, but less emphasis should be placed on supporting individual non-financial enterprises, and further resort to protectionist measures should be avoided.

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©OECD Observer No 274, July 2009