Business / Economy

OECD: global growth barely recovering

(Xinhua) Updated: 2016-06-02 10:03

PARIS - The Organization for Economic Cooperation and Development (OECD) published on Wednesday its Economic Outlook 2016 report which concluded that global growth was barely recovering, penalizing both younger and older generations.

"Growth is flat in the advanced economies and has slowed in many of the emerging economies that have been the global locomotive since the crisis. Slower productivity growth and rising inequality pose further challenges," said OECD secretary-general Jose Angel Gurria during the organization's annual ministerial council meeting.

He also added: "Comprehensive policy action is urgently needed to ensure that we get off this disappointing growth path and propel our economies to levels that will safeguard living standards for all."

OECD chief economist Catherine L. Mann further explained: "If we don't take action to boost productivity and potential growth, both younger and older generations will be worse off... The consequences of policy inaction will be low career prospects for today's youth, who have suffered so much already from the crisis, and lower retirement income for future pensioners."

The OECD economic outlook report is a twice yearly report which analyzes the major economic trends and prospects of OECD members as well as of selected non-member countries for the next two years.

According to the current report, the global GDP growth in 2016 is adjusted downwards compared to the prediction from last November, and would stagnate at around 3.0 percent, essentially the same level as in 2015, and making modest progress in 2017 to 3.3 percent.

Among the major advanced economies, the United States economy will see a moderate recovery with a growth of 1.8 percent in 2016 and 2.2 percent in 2017. The euro area however will stagnate, going from 1.6 percent in 2016 to 1.7 percent in 2017. Economic analysis of Japan showed a growth that is projected at 0.7 percent in 2016 and 0.4 percent in 2017.

For emerging countries such as China and India, growth is expected to remain at a good level, with 6.5 percent in 2016 and 6.2 percent in 2017 for China, and 7.5 percent this year and next for India. However, the deep recessions in Russia and Brazil will persist, with Brazil expected to contract by 4.3 percent in 2016 and 1.7 percent in 2017.

Moreover, OECD economists draw attention to a number of downside risks. In the short term, a British vote to leave the European Union (EU) would trigger negative economic effects on Britain, other European countries, and the rest of the world.

In the long term, by 2030, post-Brexit Britain GDP could be over 5.0 percent lower than if the country remained in the EU. This means a Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggered volatility in financial markets.

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