Echoing comments from the World Bank and International Monetary Fund, the Organization for Economic Cooperation and Development (OECD) has warned of a dangerous slowing of global growth, and the the trend may worsen.
In its Economic Outlook, the researchers of the group wrote:
The global economy is stuck in a low-growth trap that will require more coordinated and comprehensive use of fiscal, monetary and structural policies to move to a higher growth path and ensure that promises are kept to both young and old …
OECD Secretary-General Angel Gurría commented:
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.
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Also:
Slower productivity growth and rising inequality pose further challenges. 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.
Two of the world’s largest economies are in danger, particularly the long-suffering Japan:
Among the major advanced economies, the moderate recovery will continue in the United States, which is projected to grow by 1.8% in 2016 and 2.2% in 2017. The euro area will improve slowly, with growth of 1.6% in 2016 and 1.7% in 2017. In Japan, growth is projected at 0.7% in 2016 and 0.4% in 2017. The 34-country OECD area is projected to grow by 1.8% in 2016 and 2.1% in 2017, according to the Outlook.
If a return to global growth involves the U.S. engine taking the baton back from China, there is trouble ahead.
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