OECD cuts growth forecast
The Organisation for Economic Cooperation and Development (OECD) announced a reduced growth forecast for developed economies, predicting 0.8% growth for the eurozone, 3.1% growth for the UK and 2.1% growth for the US in 2014.
This represents a lower estimate compared to its last forecasts in May, when the OECD anticipated 1.2% growth for the Eurozone and 2.6% for the US.
OECD deputy secretary-general and acting chief economist Rintaro Tamaki commented: “The global economy is expanding unevenly, and at only a moderate rate. Trade growth therefore remains sluggish and labour market conditions in the main advanced economies are improving only gradually, with far too many people still unable to find good jobs worldwide. The continued failure to generate strong, balanced and inclusive growth underlines the urgency of undertaking ambitious reforms.”
The forecast highlighted that growth prospects differ widely among the major euro area economies. Germany is forecast to grow by 1.5 per cent in both 2014 and 2015, despite the current contraction of GDP growth.
The organisation also predicts the French GDP to grow by 0.4% in 2014, while Italy is expected to see a -0.4% drop in 2014.