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OECD lowers growth forecast for global economy

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The Paris-based Organisation for Economic Co-operation and Development (OECD) on Tuesday lowered its global forecast to 3.4 percent growth in 2014, down from its estimate last November of 3.6 percent growth.

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In its half-yearly economic outlook, the OECD warned that the global economy would grow by less than expected this year after it lowered its forecasts for both the United States and China.

The think tank uniting the world’s most developed countries slashed China’s growth forecast to 7.4 percent from 8.2 percent in November while the US economy is expected to grow 2.6 percent this year against last November’s 2.9 percent estimate.

The OECD also cut its 2014 forecast for Japan to 1.2 percent from 1.5 percent.

Bucking the global trend was the 18-country eurozone, whose growth forecast was raised to 1.2 percent from 1.0 percent.

The European Central Bank was urged, however, to act decisively to lift inflation and to be prepared to take “non-conventional stimulus” measures if needed.

The OECD warned that “financial tensions in emerging markets are one risk that could blow the global recovery off course”, while it said falling inflation in the eurozone was another cause for concern.

The organisation urged central banks in the main OECD member states to keep monetary policy “accommodative”, given stubbornly high unemployment, below-target inflation and high levels of government debt.

(FRANCE 24 with AP)

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