OECD: Economic Growth Shifting Back to Developed Economies
Led by the US, prospects for economic growth are improving in the world’s developed economies and even Europe is showing signs of emerging from recession according to the Organisation for Economic Co-operation and Development (OECD).
The Paris-based international economic think-tank believes that growing problems in emerging economies have largely been offset by brighter prospects for Europe, the US and Japan. Although the broad outlook for the world economy was similar to that when the OECD last pronounced in May, Jorgen Elmeskov, its deputy chief economist, said that “the numbers for advanced economies are a tad higher, and for France and the UK more than a tad higher”.
Among major economies, the US is still seen as lead the recovery with economic growth this year of 1.7%, although the figure is slightly below the OECD’s estimate of 1.9% made in a May. Reflecting the massive monetary stimulus from its central bank, the growth forecast for Japan this year is maintained at 1.6%.
However, the OECD raised its forecasts for the eurozone’s two major economies. A recovery is seen as underway in France and the OECD now expects it to manage growth of 0.3%, whereas it had forecast a -0.3% contraction in May. The growth forecast for Germany, Europe’s largest economy, is raised from 0.7%, from 0.4% previously. However, the OECD still expects the Italian economy to shrink by 1.8% this year with further declines in the second half.
Outside the eurozone the OECD almost doubled its growth forecast for the UK, to 1.5% from a forecast of 0.8% in May. It is also more hopeful on prospects for China, the world’s second-largest economy. Although it does not expect the country to return to the 10%-plus growth rates of recent years, the OECD believes it has already risen back above 8% in recent months and “looks set to recover further in the second half of 2013”.