The Israeli economy has strong fundamentals, employment is rising, inflation is low, the external surplus is comfortable, and public finances are in good shape, but productivity performance is weak, income inequalities and poverty are high.
Chile has made major gains in prosperity. Continued reforms to labour markets will help growth to be shared more equally. Ensuring that economic gains are sustainable will require sustained efforts to foster entrepreneurship and innovation.
Ireland has successfully overcome a large economic crisis. Getting the long-term unemployed back into work is the key to spreading the benefits of the recovery widely. Ireland can do more to facilitate skilled migration. Raising productivity requires boosting competition and innovation.
Iceland has steadily recovered from the financial crisis. Key challenges to ensuring sustained growth and high levels of wellbeing include consolidating macroeconomic stability, locking in progress in fiscal policy and lifting productivity growth.
Social progress over the past two decades has been impressive. But growth has not been inclusive enough due to insufficient employment growth. Macroeconomic policies are stabilising inflation and public debt. Tackling infrastructure bottlenecks and improving business regulation would boost job creation. Improving wage negotiations and job matching would also promote more inclusive growth.
The New Zealand economy has performed well in recent years, and well-being is high. However, bottlenecks in housing and urban infrastructure, inequalities in living standards, and rising environmental pressures are all challenges to achieving sustainable and inclusive growth.
Continued structural reform is key to stronger growth. Bank balance sheets need further improvements and corporates have too much debt. Fiscal consolidation should focus more on structural measures, especially given the ageing pressures.
Gross government debt has risen to 226% of GDP. Rapid population ageing is putting continued pressure on public spending, while pushing down Japan’s potential growth rate to around ¾ per cent. Bold reforms are needed to revitalise the economy.
The key challenge is to reform the labour market to promote job growth. Further labour market reforms should be the top priority. The strong protection accorded by open-ended contracts hinders labour mobility, despite the progress brought by reforms regarding mass layoffs and the introduction of the rupture conventionnelle, a mutually agreed termination procedure.
Sweden has been one of the OECD’s top economic performers in recent years. Nevertheless productivity has slowed and low-skilled youth and immigrants face difficulties finding jobs. Investing in innovation and skills is key to raising living standards and well-being further.