This publication is the OECD’s annual report highlighting developments in structural policies in OECD countries and the key emerging economies. It identifies structural reform priorities to boost real income for each OECD country and Brazil, China, India, Indonesia, Russia and South Africa. The analysis also regularly takes stock of reform implementation in all the countries covered. This report also provides internationally comparable indicators that enable countries to assess their economic performance and structural policies in a wide range of areas.
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More than six years after the onset of the financial and economic crisis, a return to the pre-crisis growth path remains elusive for a majority of OECD countries. In most advanced economies, potential growth has been revised down and, in some cases, there are growing concerns that persistently weak demand is pulling potential growth down further, resulting in a protracted period of stagnation. Risks of persistent stagnation concern mainly the euro area and Japan, but many of the underlying challenges such as slowing productivity, high long-term unemployment and falling labour force participation are common to other advanced economies. In major emerging-market economies, growth has become far less impressive in the last year or two, owing to a varying extent to infrastructure bottlenecks, financial sector vulnerabilities and resource misallocation. The slowdown has been particularly sharp in countries most exposed to commodity price developments.
While the GDP per capita gap relative to the upper half of OECD narrowed rapidly until the crisis, the convergence process slowed down afterwards, due both to a decline in potential growth and cyclical factors. The per capita GDP gap is mainly driven by the productivity gap while the employment rate remains above the OECD average.
While large, Indonesia’s GDP per capita gap relative to the upper half of the OECD is continuing to narrow, reflecting strong labour productivity growth as the economy continues to shift away from low‑productivity primary sectors to services and manufacturing. Labour utilisation is already relatively high in Indonesia but has also continued to contribute to rising GDP per capita.
The GDP per capita gap has continued to narrow relative to the upper half of the OECD. Labour utilisation has improved on account of rising labour market participation among older workers and women as well as immigration. However hours worked remain low, reflecting the low incidence of full-time female employment.