Global economy news 2014: OECD Economic Outlook points out key points for acceleration before G20 Leaders' Summit in Brisbane mid-November
The global economy is growing at a slower rate, but is expected to gather momentum gradually if countries implement growth-supportive policies. Rising difference across countries and regions are adding to the major risks on the horizon, the advanced G20 release of the
OECD’s latest Economic Outlook said.
Here are the key points of the report:
· “Global growth is modest, with widening differences across countries
· Financial risks are rising and volatility is set to increase
· Potential growth has slowed, interacting with weak demand
· Weakness in the euro area is a major concern
· Monetary, fiscal and structural policies must all be employed to address risks and support growth”
While launching the Outlook in the run-up to the G20 Leaders’ Summit that will take place on 15-16 November in Brisbane OECD Secretary-General Angel Gurría said, “We have yet to achieve a broad-based, sustained global expansion, as investment, credit and international trade remain hesitant”
“Financial risks remain high and may increase market volatility in the coming period. There is an increasing risk of stagnation in the euro area. Countries must employ all monetary, fiscal and structural reform policies at their disposal to address these risks and support growth,” Mr Gurría said.
Pointing out the growth of major advanced economies, the report said that recovery in US remains strong and is projected to grow by 2.2
percent this year and around 3 percent in 2015 and 2016, growth in euro area is expected to rise slowly from 0.8 percent in 2014 to 1.1 percent next year and 1.7 percent in 2016, likewise, Japan is expected to grow by 0.9 percent in 2014, 1.1 percent in 2015 and 0.8 percent in 2016.
OECD acknowledges that significant progress has already been made to strengthen the fiscal position of many advanced countries, particularly the US and the euro area.
Catherine Mann, OECD’s new chief economist, told Reuters, “Even though we are looking at global growth to increase up to 3.9 percent by the end of 2016, that still leaves us about a half a percentage point below our historical experience.”
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