The global economy is seen to continue expanding moderately over the next two years, but the growth can be derailed by instability in financial markets and fragility in some major economies, according to the latest economic outlook of the Organisation for Economic Co-operation and Development (OECD).
“The recovery is real, but at a slow speed, and there may be turbulence on the horizon,” OECD Secretary-General Angel Gurría said at the recent launch of the OECD Economic Outlook. He specifically noted the risk of renewed instability in the U.S. and the possibility of another flare-up in the euro area.
GDP growth across the 34-member OECD is projected to accelerate from this year’s 1.2 percent to 2.3 percent in 2014 and 2.7 percent in 2015, according to the outlook.
The world economy, by contrast, will grow at a 2.7 percent rate this year, before accelerating to 3.6 percent in 2014 and 3.9 percent in 2015. The pace of the global recovery is weaker than forecast last May, largely as a result of the worsened outlook for some emerging economies, the organization said.
The outlook for the United States is a growth of 2.9 percent in 2014 and 3.4 percent in 2015. In Japan, GDP is expected to drop to a 1.5 percent growth in 2014 and 1 percent in 2015. The euro area is expected to witness a gradual recovery, with growth of 1 percent in 2014 and 1.6 percent in 2015.
Growth has begun picking up in China but will remain weaker than previously projected in most other major emerging market economies.
“Growth since the global crisis has been uneven and hesitant,” OECD chief economist Pier Carlo Padoan said. “Clear and credible strategies are needed for how jobs and growth will be created and public finances restored. This will require a strong commitment to structural reforms in advanced and emerging market economies alike.”