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The latest assessment of global economic growth released by the OECD on September 15 says that the US economy could grow strongly in 2014 and 2015, while China will adjust to more sustainable growth rates. Growth will be strong enough to push unemployment down further in the US, the UK and Canada.
In Japan, where unemployment has already declined to low levels under the continued influence of monetary stimulation, growth is projected to come in at 0.9 per cent in 2014 and 1.1 per cent in 2015. Japan needs to pursue its quantitative easing measures to snap a deflationary trend, but it also needs to make more progress on fiscal consolidation than most other countries, adds the report.
Growth prospects for the euro economies remain the weakest among developed countries, with Italy’s growth expected to stay at (-)0.4 per cent in 2014 and gain just 0.1 per cent in 2015. Given the low-growth outlook and the risk that demand could go down further if inflation remains near zero, or even turns negative, the Organisation for Economic Cooperation and Development recommends more monetary support for the euro area. It expects the European Central Bank to undertake quantitative easing measures.
On the other hand, emerging economies are expected to continue to grow much faster than advanced economies. India is expected to pick up while Brazil will experience a rebound from the recession it experienced in the first half of this year.
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