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Consumer prices in the OECD area rose by 1.6% in the year to March 2013, compared with 1.8% in the year to February 2013. This slowdown in the annual rate of inflation mainly reflects slower growth in food and especially in energy prices.
Old ways of thinking won’t bring developed countries back to economic life. Weighed down by the legacy of the crisis, they also face deep challenges like a faltering labour supply and slowing innovation. And growth itself won’t be enough–it must also be stable, inclusive and green. The need for structural reforms has never been greater, but they will require difficult trade-offs.
Have the policy errors that contributed to the global economic crisis been rectified? Sharan Burrow shares her vision for building trust and restoring confidence in the countries still suffering from the crisis.
The forces driving Asia’s rapid growth–new technology, globalisation, and market-oriented reform–are also fuelling rising inequality. Some income divergence is inevitable in times of fast economic development, but that shouldn’t make for complacency, especially in the face of rising inequality in people’s opportunities to develop their human capital and income-earning capacity.
The tax burden in Switzerland is low in international comparison, largely reflecting the substantial non-tax compulsory contributions towards the health and pension systems which are managed by private institutions. Taxation of personal income and labour earnings is relatively high, whereas the taxation of consumption is low.
The coming expansion will be driven by exports, and should increase business investment and employment and bring an end to deflation. While we are encouraged by these developments, it remains critically important for Japan to address extremely high and still rising levels of government debt and other challenges posed by its ageing population, said OECD Secretary-General.
China’s exceptional economic expansion has led to rising energy demand and pollution as well as other environmental pressures. Strong efforts by the government have moderated emissions of some types of air and water pollution from high levels but others, including greenhouse gas emissions, continue to rise. Poor air and water quality threaten human health, create other costs and reduce well-being.
Japan's key challenges are to achieve sustained growth and fiscal sustainability. The three-pronged strategy combining bold monetary policy, flexible fiscal policy and a growth strategy should be effectively implemented to realise these goals.
Austerity programmes to restore order to public finances can add to the woes of already struggling economies, leading to more job losses and social hardship. But there are ways for governments to put their fiscal houses in order, while supporting growth and reducing income inequality at the same time.
Japan is poised for an economic expansion, but long-term growth prospects remain contingent on additional efforts to revitalise the economy and reduce unsustainable levels of public debt, according to the OECD’s latest Economic Survey of Japan.