Patchy Growth Reveals Global Economic Troubles

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Investors looking for the best place to earn a good return are facing a muddled picture of stop-go growth across the global economy.

Experts at the Organisation of Economic Cooperation and Development (OECD) have tried to unravel the puzzle with a report on global recovery.

Their forecast is much like one for the British weather – moderate growth with an uneven outlook.

The OECD looked at all the major developed and emerging economies.

The USA, Britain and Canada received slightly more encouraging support than the European Union.

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Economic scrutiny

Growth in the US is expected to hit 2.1% this year and 3.1% in 2015. Britain’s forecast is 3.1% this year and 2.8% next, while Canada is expected to reach 2.3% in 2014 and 2.7% in 2015.

The Eurozone can expect a bumpy ride, according to the OECD.

Growth for the single currency area is put at just 0.8% in 2014 and 1.1% in 2015. Within the Eurozone, the three major economic powerhouses of Germany, France and Italy could have very different outcomes.

Germany is expected to show 1.5% growth this year and next, France by 0.4% in 2014 and 1.1% in 2015, while Italy will drop to -0.4% and only 0.1% in 2015.

Growth in emerging economies is expected to outshine the output of developed countries.

China still leads the way with 7.4% this year and 7.3% next, India should reach 5.7% in 2014 and 5.9% in 2015, but Brazil is running at just 0.3% this year after pulling out of recession and climbing to 1.4% in 2015.

One of the issues faced by governments worldwide is patchy growth is failing to provide worthwhile jobs for the unemployed.

Jobless problem

“Too many workers cannot find good jobs,” said OECD Deputy Secretary-General and Acting Chief Economist Rintaro Tamaki.

“Trade is sluggish and labour markets in the leading economies are gaining ground too slowly. Some countries still need to introduce more far reaching reforms to get back on track.”

Tamaki explained the OECD expects job prospects in the US, UK and Canada are good and more people are likely to find work.

For the Eurozone, the OECD is putting pressure on the European Central Bank to boost the economy with a quantitative easing program.

“Britain and the US are right to ease their financial support for their economies,” he said. “But the Eurozone should be doing more to stimulate growth by using all the tools they have available.”

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