OECD Economic Outlook (May 22, 2011)
The global economy is gradually gaining momentum, but the recovery is fragile, extremely uneven across different regions and could be derailed by the crisis in the euro area, according to the OECD’s latest Economic Outlook. “With slow growth, high unemployment and limited room for manoeuvre regarding macroeconomic policy space, structural reforms are the short-run remedy to spur growth and boost confidence”, OECD Secretary-General Angel Gurría said during the launch of the report in Paris.
GDP growth across the OECD is projected to slow from an annual rate of 1.8% in 2011 to 1.6% in 2012, before recovering to 2.2% in 2013, according to the Outlook. Private sector demand is expected to push activity up in the United States by 2.4% this year and by a further 2.6% in 2013. In Japan, GDP is expected to expand by 2% in 2012 and 1.5% in 2013. Euro area GDP is forecast to contract by 0.1% this year, before picking up to 0.9% in 2013.
“The crisis in the euro zone remains the single biggest downside risk facing the global outlook,” said OECD Chief Economist Pier Carlo Padoan. In Europe, business and household confidence is weak, financial markets are tight and the adverse impacts of fiscal consolidation on near-term growth may be significant, particularly in countries hardest hit by the euro crisis, the OECD said. Recovery in the healthier economies, while welcome, is not strong enough to offset flat or negative growth elsewhere in Europe. Weak competitiveness must be addressed in those countries with large external deficits, while structural adjustment and higher wages in surplus countries would contribute to a growth-friendly rebalancing process, the OECD said.
Adjustments in the euro area are now taking place in an environment of slow or negative growth and deleveraging, prompting risks of a vicious circle involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth.
The Global Economy Is Gaining Momentum, But Major Risks Threaten Recovery (May 22, 2012) The global economy is gradually picking up speed, but the recovery is extremely uneven across different regions and could be derailed by the crisis in the euro area, according to the OECD’s latest Economic Outlook. For more info visit: www.oecd.org/oecdeconomicoutlook
About The OECD The 34 OECD member countries are: Australia, Austria, Belgium, Canada, Chili, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States, plus the Euro Area and European Union. Accession countries are now are just the Russian Federation. Enhanced Engagement Economies are Brazil, China, India, Indonesia, and South Africa.