OECD warns of 鈥榣ow-growth trap鈥
Print Edition
THE world economy risks getting caught in a “low-growth trap” if governments don’t spend more on investments, open up to trade, and make reforms, a top economic forum warned yesterday.
The Organization for Economic Co-operation and Development said in a wide-ranging report that it is increasingly pessimistic about the global outlook and cut its growth forecasts.
Among the risks identified by the Paris-based economic agency, which represents the world’s most developed economies, was a potential British exit from the European Union, volatility in financial markets, and Europe’s inability to find a common response to its refugee flows.
Above all, the OECD said in its Global Economic Outlook that weak growth risks becoming chronic.
“This low growth trap involves a cycle in which diminished expectations become self-fulfilling,” said Angel Gurria, the OECD’s secretary-general.
According to the OECD, firms are too cautious to invest, are holding back innovation and productivity. As a result, households are getting more pessimistic about jobs and the future. The ensuing weaker consumer spending then feeds back into pessimism among companies, creating a vicious cycle.
Though the US economy has improved in recent years, the next biggest economy, China, is slowing. Because it’s a major consumer of raw materials and energy, as well as being a huge exporter and increasingly important consumer, concerns have grown over the state of the world economy.
Elsewhere, the European economic recovery has failed to gain much traction while Japan remains sluggish. And emerging markets are struggling to deal with volatile currencies, high debt and the crash in prices for goods they export — Brazil and Russia, for example, are in deep recession.
The OECD said countries have relied too much on central banks to stimulate demand and should instead look to strengthen public investment and make their economies more competitive through structural reforms.
The OECD is forecasting global growth of 3 percent this year and 3.3 percent next. Both are down 0.3 percentage point from its last set of forecasts in November.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
