Global leaders heard that the world economy is still sluggish but will slowly pull clear of the doldrums if governments commit to the right policies at the latest summit of G20 ministers.
One of the main problems is no one fits all solution is available as different regions and countries are battling different economic problems, Organisation of Economic Cooperation and Development (OECD) Secretary-General Angel Gurría told the ministers.
World GDP is predicted to peak at 3.3% this year, but will step up to 3.7% during 2015 and 3.9% in 2016, according to the OECD’s latest Global Outlook.
The forecast is toned down from other OECD predictions issued earlier this year and well below world GDP figures before the downturn struck.
In a country-by-country analysis, the OECD expects:
- The US to lead the way as the world’s best performing recovering economy, with 2.2% growth this year, stepping up to 3% in 2015 and 2016
- Japan is unlikely to hit the same heights as the US, with growth of 0.9% in 2014, 1.1% next year but a slump back to 0.8% in 2016
- The Eurozone is likely to suffer some stagnation with GDP of 0.8% this year rising to 1.1% in 2015 and 1.7% in 2016
- As the Chinese government tries to rebalance the economy, growth is expect to slow from 7.4% in 2014 to 7% next year
- GDP in Brazil and Russia is flagging – Russia is suffering from economic sanctions, a weak rouble and falling oil prices. GDP is expected to drop from 0.7% in 2014 to zero or less next year before climbing back to 2% in 2016
Meanwhile, in Brazil, which is another rebalancing economy, growth will peter out to 0.3% this year and struggle back to 1.5% then 2% the year after
- India is another global shining light, with a gleaming GDP of 5.4% in 2014, 6.4% in 2015 and 6.6% in 2016
“The world economic outlook is hesitant,” said Gurria. “Financial risk is still considered high and this is causing volatility in the markets that is feeding through to undermine confidence even more.
“The Eurozone is a big problem as the likelihood of stagnation leading to recession is high. Governments most use all the economic tools they have to boost their growth but to also help other countries in a less fortunate position if the world is to shake off this malaise.”