A pace of growth slower than expected even three months ago, an environment of low interest rates with risks to the financial system, and cooling economic in the United States, euro zone and emerging countries – is so that the Organization for Economic Cooperation and Development (OECD) looks at the evolution of the world economy.
The institution led by Ángel Gurría downloaded this Wednesday the forecast overall growth for this year and next, warning for the weaker signals in the trade and to the risks of financial instability. The chief economist of the OECD Catherine Mann warns even that the slowdown extended can become a "trap of low-growth", with reflections on trade, investment, productivity and wages.
After a variation of 3.1% in the past year, the OECD predicts that the global GDP to advance by 2.9% this year, less the 0.1 percentage point higher than the forecast made in June. For the next year, the organization expects world economic activity to accelerate (3,2%), but less than in the forecast made three months ago.
The data show predictions only for the main economies and regions of the world. For the United States – "where consumption is robust and job creation are mitigated by a weak investment" – the cut in the forecast was more pronounced. The expected growth is 1.4% in 2016, down by 0.4 points from that in June. For 2017 it is expected an acceleration of economic activity, to 2.1%, but also lower than expectations three months ago. The forecasts and alerts from the OECD have been known on the same day that the U.S. Federal Reserve would postpone a rise of its main benchmark rates.
For the euro region, the OECD is projecting growth of 1.5%. The downward revision is also 0.1 points in relation to the value referred to there are three months and represents a deceleration more pronounced. The prospects for next year continue to be the economic downturn, with the GDP advancing by 1.4%. The decline in the forecast for 2017 is more pronounced, with a difference of 0.3 points in comparison with the value of June.
THE OECD is more optimistic in relation to Germany, predicting that it will grow this year by 1.8%, but more pessimistic about the next year, in which the main economy of the euro should slow down. For France and Italy, the forecasts have been revised down both for this year as for the next. The organization account that the French economy will grow by 1.3% this year and maintain the same pace in 2017. As to Italy, points to a growth of 0.8% in this and next year.
Not only the slowdown of the United States and major european economy, in particular the United Kingdom, leading the OECD to review low their projections. Also weigh the slowdown witnessed in the trade with Asia at the beginning of the year and the "distortions of the financial system [that] casts a shadow over growth prospects". And it’s not just for the european economy that the process of negotiation of the output of the United Kingdom of the European Union clouded by the levels of growth. According to the OECD, "the slight downward revision" of the global outlook reflects the reduction of the forecasts in the main developed economies, including the Uk in 2017, counterbalanced by a progressive improvement of the activity of the main producers of raw materials".
For the United Kingdom, the institution associates the economic slowdown to the result of the referendum of June 23 for the exit of the country of the European Union. The likeness of the world economy, the Uk will grow this year less than in 2015. But if the OECD until revised slightly in high and forecast to 2016 compared to what it projected in June to 1.8% instead of 1.7%, the prospects for next year are to slow down, on a trajectory contrary to the progress of the world economy.
"Thanks to the strong response of the bank of England have helped to stabilise the markets, the uncertainty remains extremely high and the risks are clearly negative", it is expected that the Uk will grow "well below the pace of recent years", stresses the organization.
according To the OECD report, it is necessary to take into account that "interest rates exceptionally low – and in some cases negative – are distorting the financial markets and amplified the risks in the financial system. The disconnect between the high prices of bonds and shares, and between the deterioration of results and growth expectations, combined with the overheating of the markets of real estate in many countries increases the vulnerability of investors" in the case of a strong correction of asset prices, warns the OECD.
The chief economist of the OECD Catherine Mann, departed a plea for there to be a global response to increase demand, to consider "very worrisome the lack of political support in favor of trade policies whose benefits would be widely shared [among countries]".
The institution argues that governments with fiscal space to go further on the stimulus to demand, without descurarem the application of "structural reforms". The OECD argues that countries must ensure that "gains of globalization are broadly shared," and that the measures aimed at global growth will reduce the risks on the banking system.
The appeal is directed against the EU by Catherine Mann, a staff position published in the blog of the OECD Ecoscope. "The fiscal policy of the eurozone must also do more to support growth, flexibility in the application of the Stability and Growth Pact of the EU and excluding [accounting for the] expenditure of the net investment of the budget rules," writes the chief economist.
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