Leading economies stuck on ‘stable’ growth path: OECD

PARIS - Agence France-Presse

OECD Secretary-General Angel Gurria is seen in this file photo. The organization has warned that leading economies have been gripped by weak growth.

Growth is stuck on a stable growth path in advanced economies, with the United States, Canada and Britain on a steady rise but Germany and Italy are showing signs of slowing down, the OECD said Sept. 8.

There is widespread concern that the 18-member eurozone economy is flagging at a level of weak growth, and the latest leading indicators from the Organisation for Economic Cooperation and Development showed that the single currency zone is stuck on this growth path.

This will be seen as disappointing since governments and economists are looking for signs that the weak eurozone recovery is picking up speed.

The lack of overall signs that the world economy, and notably the most advanced economies, are gathering speed will also be seen as disappointing.         

Christine Lagarde, the head of the International Monetary Fund which produces benchmark forecasts, hinted in the Les Echos newspaper in Paris yesterday that the organization could lower its outlook for world growth this year. “We are in the process of updating our forecasts. World growth should be just above three percent this year, between 3.0 and 3.5 percent,” Christine Lagarde told the newspaper.
The IMF had previously forecast global growth at 3.4 percent for this year, and will release new projections on October 7. Lagarde said world growth was “too weak, fragile and uneven.”

The fragile state of the eurozone, and the increasing threat of deflation, led the European Central Bank to take strong action last week to inject cash into the economy in the hope this will boost growth and push up prices.

The OECD provides research and policy advice to 34 advanced democracies which form its membership, and its index of the leading indicators covers mainly their economies.