Macroeconomic developments and policy challenges

A strong post-pandemic recovery, largely driven by domestic demand, lifted the economy above its potential in late 2021 and early 2022 (Figure 2.1). Since then, growth has shifted into reverse with four consecutive quarters of falling GDP. High inflation has curtailed the purchasing power of househo...

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Bibliographic Details
Main Author: Pionnier, Pierre-Alain
Format: Book Chapter
Language:English
Online Access:Get full text
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Summary:A strong post-pandemic recovery, largely driven by domestic demand, lifted the economy above its potential in late 2021 and early 2022 (Figure 2.1). Since then, growth has shifted into reverse with four consecutive quarters of falling GDP. High inflation has curtailed the purchasing power of households and weighed on private consumption, while private investment has been held back by higher interest rates and lower confidence. Public investment has decreased but public consumption has remained supportive. External demand has also supported growth, although mainly related to lower imports in the face of falling domestic demand.
ISSN:1995-3461
1999-0529
DOI:10.1787/7154fde8-en