Page 18 - Economic report 2018

OECD ECONOMIC PROSPECTS FOR THE MAIN DEVELOPED COUNTRIES
Table 1.2

UNEMPLOYMENT CURRENT ACCOUNT
GDP INFLATION (1) RATE (2) BALANCE PUBLIC DEFICIT
% annual variation % annual variation % active population % of GDP % of GDP
2018 2019f 2020f 2018 2019f 2020f 2018 2019f 2020f 2018 2019f 2020f 2018 2019f 2020f
USA 2.9 2.8 2.3 2.0 1.4 2.1 3.9 3.7 3.6 -2.4 -2.4 -2.6 -6.6 -6.6 -6.7

Japan 0.8 0.7 0.6 1.0 0.8 1.5 2.4 2.4 2.4 3.5 3.0 3.2 -2.5 -2.5 -2.0
United 1.4 1.2 1.0 2.5 1.7 1.9 4.1 3.9 3.9 -3.9 -5.6 -5.0 -1.6 -2.1 -2.0
Kingdom
Eurozone 1.9 1.2 1.4 1.8 1.2 1.5 8.2 7.9 7.7 3.6 3.6 3.5 -0.5 -0.9 -0.8
Germany 1.4 0.7 1.2 1.9 1.5 1.7 3.4 3.1 2.8 7.4 7.3 7.0 1.7 0.9 0.8
France 1.7 1.3 1.3 2.1 1.1 1.3 9.1 8.7 8.5 -0.3 0.0 0.1 -2.5 -3.2 -2.3

Spain 2.6 2.2 1.9 1.7 1.0 1.6 15.3 18.8 12.7 0.9 0.8 0.7 -2.5 -2.0 -1.3
OECD 2.3 1.8 1.8 2.3 2.0 2.3 5.3 5.3 5.2 0.3 0.1 0.03 -2.8 -3.0 -2.9
(1) For the OECD and the USA, the private consumption deflator was used.
(2) Unemployment rate calculated using national not harmonised definitions.
f: forecasts.
Note: the 2018 GDP data relate to the final data published in July by both the IMF and the European Commission.
Source: OECD, May 2019.

In the case of the Eurozone, all international bodies predict that GDP growth in 2019 will slow
to 1.3%-1.2%. By countries, the European Commission, in its report in July 2019, predicts that
only growth in Greece will improve in 2019, compared with 2018. In Italy, virtual stagnation is
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expected (0.1%), and in Germany a very weak increase of 0.7%. In Spain, growth is expected
to fall three tenths to 2.3%, although it will
still lead growth among the major Eurozone In 2019 the Eurozone economy
economies. In the case of France, a slowdown will continue to weaken.
in GDP growth will occur, to reach 1.3%.

The external environment of the Andorran economy | I. The international economy
However, the data on the trend in Eurozone GDP for the first quarter of 2019 was better than
expected, with interannual growth of 1.2%, the same rate as the previous quarter. So, the
slowdown in recent periods eases to quarter-on-quarter growth of 0.4% in the first quarter
of 2019, after 0.1% and 0.2% in the third and fourth quarter of 2018. The particular driving
force behind this improvement is Germany which, after a very bad second half of 2018, in
which it shifted between contraction and stagnation, it finally grew four tenths in the first
three months of 2019. The other good news is that Italy has avoided recession, although in
this case the upswing in GDP was smaller (remaining at 0.1%). Note that this country emerged
from a technical recession, as it saw GDP falls of 0.1% in the last two quarters of 2018.

In 2019, the Eurozone labour market will continue to recover, leading the unemployment rate
to fall half a point to 7.7%, according to the European Commission. The easing of targets
for reducing the public deficit (predicted to reach 0.9% of GDP) will also contribute to the
economic recovery. For its part, Eurozone inflation remained moderate in the first four months
of the year (1.5% on average) and is forecasted to reach about 1.3% for the whole year, due
to the interannual drop in oil prices.

In the first few months of 2019, the euro continued its trend of depreciation against the US
dollar that was already seen in 2018. Finally, oil prices rose again in the first few months of
2019 due to the OPEC agreements with other oil-producing countries to reduce supply; US
sanctions against Iran and the global problems affecting Venezuela. Remember that in April