Slow growth, high uncertainty and rising levels of inequality should prompt policy makers to take urgent action to achieve stronger, sustainable and more inclusive growth, states the OECD’s annual Going for Growth report.
This year’s edition presents the top structural reform priorities in 46 OECD and non-OECD economies, alongside assessment of progress countries have made on key reforms in the past years.
In terms of fiscal policy, the report defends that cyclical developments should not divert attention from long-term objectives and structural reforms needed to achieve them; however, they may affect the emphasis in the design and implementation of reform packages.
An example put forth by the report is that in the case where demand is particularly weak, and fiscal space permits, governments can do more to complement structural efforts with fiscal stimulus. Examples include investing in infrastructure, especially digital, transport and energy, enhancing people’s skills, and more generally implementing policies that favour equal opportunities.
The report provides country-specific examples, and argues that even if in the aftermath of the global crisis the pace of reforms was high it is now receding and stabilizing at pre-crisis levels, the benefits of the previous reforms are still materializing and this implies a lost opportunity to boost growth.
Access the full report through this link.