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Brazil’s economic fundamentals have improved considerably in the ten years following the abandonment of exchange rate management in 1999 and adoption of a policy framework combining inflation targeting, rules based fiscal management and a flexible exchange rate. The economy is therefore weathering the effects of the unfolding global financial and economic crisis rather well, and an incipient recovery is getting under way. The policy
Despite considerable progress in many areas, there remains substantial scope for making government operations more cost-effective. Brazil spends a high share of GDP on selected government financed programmes in relation to many OECD countries and its emerging-market peers, but outcome indicators are often comparatively poor. As a result, in the absence of efficiency gains, further increases in spending would need to be financed
Despite the current problems related to the global financial and economic crisis, ongoing macroeconomic adjustment continues to bear fruit. Attainment of the primary budget surplus targets has delivered falling public debt-to-GDP ratios since 2003. Prudent debt management has reduced refinancing risk and external vulnerabilities. The forward looking conduct of monetary policy within a framework combining inflation targeting with a
Brazil has not been left unscathed by the unfolding global crisis. But economic fundamentals are strong, and the macroeconomic policy responses have been appropriate. Longer-term challenges remain, including the need for tax reform and to make government operations more cost-effective.
While Austria’s education system has long equipped the Austrian labour force with good vocational skills, it now faces major challenges to provide youth with new, higher and more generic skills.
Significant fiscal consolidation will be needed after the recession. The authorities should improve the spending and tax structure, efficiency of public spending and continue with fiscal federalism reforms
Stimulating competition, innovation and investment in services and fostering the employment of low-skilled workers would help increase potential output and social cohesion.
Slovenia achieved strong economic growth leading to a marked catch up with the EU15 during the last decade. This dynamic growth has been interrupted by the global recession, adversely affecting Slovenian exports and banks’ refinancing possibilities. As the economy recovers, efforts to achieve real convergence need to be renewed.
Though labour market outcomes have improved markedly in past years, some challenges remain such as low labour force participation of the elderly, low employment rates of youth and rising labour market dualism.
Slovenia belongs to the group of new EU member countries, which have given a high priority to fiscal prudence. This both stabilised the economy and paved the way for entry to the EU in 2004 and adoption of the euro in 2007. It also created room to counteract the current weakening of the economy. But fiscal policy has to cope with four main challenges: i) ensuring a return to fiscal consolidation after the current economic downturn;