OECD Says Global Growth Improving, But Self Sustained Recovery Not Secured

Prospects for UK exports have improved according to the latest update in economic outlooks from the OECD
Credit
Jason Alden  Bloomberg

Prospects for UK exports have improved according to the latest update in economic outlooks from the OECD Credit Jason Alden Bloomberg

The OECD said deeper reforms would be needed to ensure strong future growth in emerging economies, while monetary policy should remain supportive in a number of countries while keeping an eye on financial stability.

Expanding investment, employment and trade support have increased growth across most countries, but the recovery of business investment and trade remain too low to sustain healthy growth and wage growth has been "disappointing on average".

"The short-term outlook is more broad-based and the upturn is promising, but there is no room for complacency", OECD Chief Economist Catherine L. Mann said in the statement.

OTTAWA-The Organization for Economic Co-operation and Development has raised its expectations for economic growth in Canada this year compared with a June forecast.

It has left its forecasts for British growth across the two years unchanged since June at 1.6 per cent in 2017 and 1 per cent in 2018, but has upgraded Europe and the world...

In 2017, the USA and Chinese economies will expand 2.1 and 6.8 percent, respectively, according to the OECD's latest Interim Economic Outlook.

Growth this year is "higher than in 2016 but still below historical norms" said the OECD, which advises industrial nations on economic policy.


The risk of an interest rate rise next year has become a hot topic among economists following the recent run of strong jobs growth.

The OECD forecast that the economic growth in Euro area will be 2.1 percent this year while it will be 3.7 percent for G20 countries.

In the United Kingdom, the previously identified growth slowdown is expected to continue through 2018, while uncertainty remains over the outcome of negotiations around the decision to leave the European Union. The outlook for 2018 was similarly raised, to 6.6 percent.

Japan's expected growth was also revised higher by 0.2 percentage point for this year and next, to 1.6 percent and 1.2 percent, respectively.

The downward revision was due to the transitory effects of demonetization and of the implementation of the Goods and Services Tax (GST), the group said.

In its latest interim economic outlook the OECD warned the long period of low interest rates has boosted house prices and created financial distortions that will be "testing to resolve".

It also said China's strong growth has benefited emerging market economies.

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