Global Economy Better, But Still Not Good Enough: OECD

Published June 8th, 2017 - 02:19 GMT
After half-a-decade of near stagnation and weak growth, the global economy is set on a path for more moderate expansion of around 3.8 percent in 2018. (OECD)
After half-a-decade of near stagnation and weak growth, the global economy is set on a path for more moderate expansion of around 3.8 percent in 2018. (OECD)

After half-a-decade of near stagnation and weak growth, the global economy is set on a path for more moderate expansion of around 3.8 percent in 2018, the Organization for Economic Cooperation and Development (OECD) said on Wednesday.

The OECD stressed that the 2018 forecast of 3.8 percent growth of global Gross Domestic Product (GDP) indicates a relatively sharply increase from the 3.0 percent recorded in 2016, when the last two-yearly forecast was published.

In the industrialized OECD nations, GDP is projected to grow by 2.1 percent in 2017 and 2018 compared with 1.8 percent in 2016.

But the OECD Secretary-General Angel Gurria warned that the expected OECD area growth rates were not enough "to sustain strong gains in standards of living across the OECD countries."

He called for "coherent" policies "that support inclusiveness and productivity growth" which he said were "urgently needed" for the well-being of society.

Nonetheless, he noted that stronger business and consumer confidence, in addition to rising industrial production, better employment and trade flows were pushing global growth higher.

In the US, the OECD report said GDP growth should reach 2.1 percent and 2.4 percent, respectively in 2017 and 2018, up from 1.6 percent in 2016.

Japan's GDP is also expected to rise from 1.0 percent in 2016 to 1.4 percent in 2017, before falling back to 1.0 percent in 2018, the report said.

The Euro area is to see steady growth at 1.8 percent in 2017 and 2018, practically unchanged from 1.7 percent in 2016.

But China's GDP should decline for earlier highs and stabilize at 6.6 percent in 2017 and drop further to 6.4 percent in 2018.

The UK’s economic growth is expected to dip this year before dropping sharply in 2018, according to the OECD. 

The OECD said that while the growth rates were encouraging, they were still down on usual "norms" for global expansion.


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