OECD: Global economy recovering at moderate pace

The global economy is expected to continue expanding at a moderate pace over the coming two years according to the OECD’s latest Economic Outlook. There are, however, some risks ahead that could destabilise the economy.

“There is a risk of another bout of brinkmanship in the US, and there is also a risk that tapering of asset purchases by the US Federal Reserve could bring a renewed bout of instability,” said OECD Secretary-General Angel Gurría during the Outlook launch in Paris. Policymakers must therefore ensure that instability in financial markets and underlying fragility in some major economies are not allowed to derail growth.

GDP growth across the 34-member OECD is projected to accelerate from this year’s 1.2 per cent rate to a 2.3 per cent rate in 2014 and a 2.7 per cent rate in 2015, according to the Outlook. The world economy, by contrast, will grow at a 2.7 per cent rate this year, before accelerating to a 3.6 per cent rate in 2014 and 3.9 per cent in 2015. The pace of the global recovery is weaker than forecast last May, largely as a result of the worsened outlook for some emerging economies.

Growth in the United States is projected at a 2.9 per cent rate in 2014 and a 3.4 per cent rate in 2015. In Japan, GDP is expected to drop to a 1.5 per cent growth rate in 2014 and a 1 per cent rate in 2015. The euro area is expected to witness a gradual recovery, with growth of 1 per cent in 2014 and 1.6 per cent in 2015.

Growth has begun picking up in China but will remain weaker than previously projected in most other major emerging market economies. A group of emerging OECD member countries – Chile, Turkey, Mexico, Korea and Israel – will continue out-pacing growth in other advanced economies.

Further reading on: http://www.oecd.org/newsroom/global-economy-recovering-at-moderate-pace-but-more-risks-ahead.htm