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OECD Cuts Global Growth Outlook on Emerging-Market Slowdown

OECD Cuts Global Growth Outlook on Emerging-Market Slowdown (Bloomberg)

The Organization for Economic Cooperation and Development cut its global growth forecasts for this year and next year to reflect the cooling of emerging-market economies, including India and Brazil. The world’s economy probably will expand 2.7 percent this year and 3.6 percent next year, instead of the 3.1 percent and and 4 percent, respectively, predicted by OECD in May, the Paris-based group announced in its semi-annual report today. “Most of the emerging economies have underlying fragilities that mean they cannot continue growing as they used to,” OECD Chief Economist Pier Carlo Padoan said. “They used to be an important support engine for global growth in bad times. Now the reverse is true and advanced economies can’t be said to be in very good times again.” The reduced growth prospects underline how the global economy remains vulnerable five years after the collapse of Lehman Brothers Holdings Inc. While the euro-area has exited a recession, the OECD said the European Central Bank should look at ways to ease monetary policy further and the Federal Reserve must sustain its accommodative stance for some time before tapering its stimulus efforts.

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The Organization for Economic Cooperation and Development cut its global growth forecasts for this year and next year to reflect the cooling of emerging-market economies, including India and Brazil.

archive

OECD Cuts Global Growth Outlook on Emerging-Market Slowdown

The Organization for Economic Cooperation and Development cut its global growth forecasts for this year and next year to reflect the cooling of emerging-market economies, including India and Brazil.

OECD Cuts Global Growth Outlook on Emerging-Market Slowdown (Bloomberg)

The Organization for Economic Cooperation and Development cut its global growth forecasts for this year and next year to reflect the cooling of emerging-market economies, including India and Brazil. The world’s economy probably will expand 2.7 percent this year and 3.6 percent next year, instead of the 3.1 percent and and 4 percent, respectively, predicted by OECD in May, the Paris-based group announced in its semi-annual report today. ??Most of the emerging economies have underlying fragilities that mean they cannot continue growing as they used to,? OECD Chief Economist Pier Carlo Padoan said. ??They used to be an important support engine for global growth in bad times. Now the reverse is true and advanced economies can??t be said to be in very good times again.? The reduced growth prospects underline how the global economy remains vulnerable five years after the collapse of Lehman Brothers Holdings Inc. While the euro-area has exited a recession, the OECD said the European Central Bank should look at ways to ease monetary policy further and the Federal Reserve must sustain its accommodative stance for some time before tapering its stimulus efforts.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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