The Organization for Economic Cooperation and Development (OECD) has issued a warning about the persistent stagnation of the global economy, revising downwards its growth forecasts for the coming years.
In its latest Economic Outlook, the OECD projects global growth of 3.3% in 2015, down from its previous forecast of 3.7%. The outlook for 2016 is also subdued, with growth expected to reach only 3.6%.
The report highlights several factors contributing to the slowdown, including:
- Weak demand in the Eurozone and Japan
- Slowing growth in emerging markets
- Geopolitical risks
The OECD emphasizes the need for governments to take action to boost growth, including:
- Implementing structural reforms to improve productivity and competitiveness
- Increasing public investment in infrastructure
- Pursuing accommodative monetary policies
“The global economy is facing a number of serious challenges,” said OECD Secretary-General Angel Gurría. “Governments need to take bold action to boost demand and supply, and to create a more inclusive and sustainable growth model.”
The OECD’s warning comes as other international organizations, such as the International Monetary Fund (IMF), have also expressed concerns about the state of the global economy.
Regional Outlook
Eurozone
The OECD has significantly lowered its growth forecast for the Eurozone, citing weak demand and high unemployment. The organization projects growth of just 0.8% in 2014 and 1.1% in 2015.
Japan
Japan’s economy is also struggling, with the OECD forecasting growth of just 0.5% in 2014 and 0.8% in 2015. The organization calls on the Japanese government to accelerate structural reforms and implement further fiscal stimulus measures.
United States
The United States is expected to be a relative bright spot, with growth projected at 2.2% in 2014 and 3.1% in 2015. However, the OECD warns that the US economy is still vulnerable to external shocks.
