3DEVELOPMENTSININDIVIDUALOECDANDSELECTEDNONMEMBERECONOMIES - PDF document

1 3.DEVELOPMENTSININDIVIDUALOECDANDSELECTE
3.DEVELOPMENTSININDIVIDUALOECDANDSELECTEDNON-MEMBERECONOMIES OECDECONOMICOUTLOOK,VOLUME2016ISSUE2©OECD2016–PRELIMINARYVERSIONGREECEGrowthhasreboundedinthesecondhalfof2016andisprojectedtogainstrengthin2017and2018asstructuralreformsstarttobearfruit,theconclusionofapolicyreviewwithcreditorsraisesbusinessandconsumerconfidenceandtheeconomicandpoliticalenvironmentstabilises.Exportsofservicesareunderperformingbecauseofstructuralrigiditiesandcapitalcontrols(whichparticularlyaffecttheexportrevenuefromtheshippingindustry).Employmentisprojectedtoincreasebutunemployment 200820092010201120122013201420152016 -50-40-30-2001020Y-o-y % changes-50-40-30020% balance, s.a. Real investment growth Business confidence¹Investment is boostedby renewed confidence 200020022004200620082010201220142016 354065% of GDP Revenues ExpendituresFiscal consolidation is milder 3.DEVELOPMENTSININDIVIDUALOECDANDSELECTEDNON-MEMBERECONOMIES OECDECONOMICOUTLOOK,VOLUME2016ISSUE2©OECD2016–PRELIMINARYVERSIONGDPgrowthisexpectedtodecreasefurtherduetotheimpactofBrexitandtherefugeecrisis.Financingconditionsarestillweakwiththehighlevelofnon-performingloanslimitingcredit,despitethegradualbutsteadyeasingofthecapitalcontrols.Notwithstandingweakactivity,employmenthascontinuedtoincrease,especiallyinmanufacturing,butunemploymentisstillveryhigh,resultinginagreatdealofpoverty.Theprimarybudgetsurplusisexpectedtobeabovethetargetof0.5%ofGDPin2016.Thegovernmenthaslegislatedfiscalmeasurestoreachtheprimarysurplustargetof1.75%ofGDPfor2017and3.5%for2018.Thesemeasuresincludebroadeningofthetaxbaseaswellasspendingcutsatatimewhensocialneedsareimportant.Thegovernmentisundertakingapilotreviewofsomespendingcategoriesandplanstoextendthereviewtotheentirepublicadministrationtoidentifyinefficiencies.Theaimwillbetoredirectresourcestowardssocialprotectionmeasurestocombattheexclusionandpovertythataroseinthewakeofthecrisisthatbeganin2009.Notwithstandingthesewelcomeinitiatives,somefor

2 mofdebtreliefwillbeneededtoraisegrowthan
mofdebtreliefwillbeneededtoraisegrowthandincomes.Greece:Demand,outputandprices 201320142015201620172018Current prices EUR billion GDP at market prices 180.5 0.4 -0.3 0.0 1.3 1.9 Private consumption 127.8 0.7 0.3 -0.9 0.8 1.6 Government consumption 37.1 -2.4 -0.1 -1.7 -1.1 -0.4 Gross fixed capital formation 21.7 -2.7 0.9 3.3 4.3 4.6 Final domestic demand 186.5 -0.3 0.3 -0.6 0.8 1.6 Stockbuilding 1 , 2 - 1.0 1.4 -1.7 1.3 -0.1 0.0 Total domestic demand 185.5 1.1 -1.1 0.6 0.8 1.6 Exports of goods and services 55.0 7.4 -3.8 -7.5 3.9 4.9 Imports of goods and services 60.1 7.8 -6.9 -2.2 2.6 3.5 Net exports- 5.1 -0.3 1.2 -1.6 0.3 0.3 Memorandum itemsGDP deflator _-1.9 -1.1 0.1 0.9 1.2 Harmonised index of consumer prices _-1.4 -1.1 0.1 1.1 1.4 Private consumption deflator _-2.8 -1.3 -0.2 0.7 1.3 Unemployment rate _26.5 24.9 23.5 23.1 22.7 General government financial balance 3 , 4 _-3.6 -7.5 -2.0 -0.2 0.5 General government gross debt 5 _182.8 183.9 185.7 182.7 177.6 General government debt, Maastricht definition 3 _179.8 177.7 179.7 176.6 171.5 Current account balance 6 _-1.6 0.1 -1.0 -0.6 -0.1 1. Contributions to changes in real GDP, actual amount in the first column. 2. Including statistical discrepancy. 3. National Accounts basis, as a percentage of GDP.5. As a percentage of GDP. 6. On settlement basis, as a percentage of GDP.Source: OECD Economic Outlook 100 database. Datafor2013includetotalgovernmentsupporttofinancialinstitutions.DataalsoincludeEurosystemprofitsonGreekgovernmentbondsremittedbacktoGreece.For2015-2017,dataincludetheestimatedgovernmentsupportto financial institutions and privatisation proceeds. Percentage changes, volume (2010 prices) 3.DEVELOPMENTSININDIVIDUALOECDANDSELECTEDNON-MEMBERECONOMIES OECDECONOMICOUTLOOK,VOLUME2016ISSUE2©OECD2016–PRELIMINARYVERSIONThefullimp

3 lementationofstructuralreformsisneededto
lementationofstructuralreformsisneededtoenhanceinclusivenessThesocialcostofthecrisishasbeensevereandthepovertyratealmosttripledbetween2007and2013,whenmeasuredagainstpre-crisisincomes.Fullyimplementingsocialpolicies,suchastheguaranteedminimumincome,atargetedschoolmealandhousingassistanceprogrammes,isthereforeneeded.Theconclusionofthepensionsystemreformwillimprovefairness,aspensionersarebetteroffthantheyoungergeneration,andfreeupresourcesforgreatersupportforthepoorandtheunemployed.Themodernisationofthepublicemploymentservicewouldbenefitthehighnumberofunemployed,especiallyamongyouthandthelong-termunemployed.Theimplementationofstructuralreforms,especiallythereductionofoligopolypowerandregulatoryburdens,hasbeentooslowtogeneratesustainablegrowth.Furtherreducingadministrativeburdensandopeningupofprofessionswouldenhanceproductivityandinvestment,particularlyforSMEs.Continuingeasingofregulationsinenergy,communicationsandtransportswouldraisecompetitivenessandenhanceexports.Theaccelerationofprivatisationswouldraisecompetitivenessandefficiency.Furtherbroadeningthetaxbaseandensuringthatthenewindependentpublicrevenueagencyimprovestaxcomplianceandcollectionwouldincreaserevenuesandhelpfightingtaxevasion.Thatrevenuecouldbeusedtosupportsocialpoliciesandtomakegrowthmoreinclusive.GrowthisprojectedtoreboundbutuncertaintyremainsOutputgrowthisprojectedtogainstrengthasstructuralreformsboostinvestmentandconsumption.Employmentwillincreasebutunemploymentwillstayhigh,especiallyforyouth.Inflationisprojectedtoreboundslightlyovertheprojectionperiod,pushedupbystrongerwagegrowth.Fullandswiftimplementationofstructuralreforms,fasterimprovementintheliquidityandfinancingconditionsofthebankingsystem,andsomeformoffurtherdebtreliefwouldspurconfidenceandtherecovery.WeakerglobaltradeandgrowthintheEuropeanUnionandChinawouldaffectGreekexports.GeopoliticaltensionsamongGreece’sneighboursandtherelatedrefugeecrisiswouldposesignificantadditionalchallenges