OECD Economic OutlookVolume 2011/2© OECD 20119Chapter 1 GENERAL ASSESSMENT OF THE MACROECONOMIC SITUATIONThe statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The useof such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israelisettlements in the West Bank under the terms of international law.1.GENERAL ASSESSMENT OF THE MACROECONOMIC SITUATIONOECD ECONOMIC OUTLOOK, VOLUME 2011/2 © OECD 2011 – PRELIMINARY VERSION10Summary● More than usual, world economic prospects depend on events, notably policy decisions related to theeuro-area debt crisis and US fiscal policy. The nature and timing of many such events remain highlyuncertain and the projection presented in this Economic Ou tlook therefore portrays a “muddling-through”case in the absence of decisive events.● With this caveat, and against a profound loss of confidence related to the euro area debt crisis and USfiscal policy, the muddling-through projection involves very weak OECD growth in the near term, and amild recession in the euro area, followed by a very gradual recovery.● Concomitantly, unemployment would remain at a high level through2013 and inflation would be underdownward pressure in most regions.● This calls for a continuation of present easy monetary policy stances for a considerable period and insome cases, most notably the euro area, a substantial relaxation of monetary conditions.● Underlying budget consolidation is assumed to take place in most OECD countries; in the United Statesit is assumed to be weaker than embodied in current legislation, so as not to unduly restrain growth, andbroadly in line with official consolidation plans...
