OECD expects Turkey to grow 3 percent this year

PARIS

There is a risk of stagnation in Europe that could have an impact worldwide, while Japan has fallen into a recession, says OECD Secretary-General Angel Gurría. AFP photo

Turkey will grow 3 percent this year, the OECD stated on Nov. 25 in its latest Economic Outlook, confirming its growth forecast for the country 3.2 percent in 2015 and 4 percent in 2016.

The global economy will gradually improve over the next two years but Japan will grow less than previously expected while the eurozone will continue to struggle with stagnation and an increased deflation risk, it said.

“We are still far from being on the road to a healthy recovery. There is a growing risk of stagnation in the euro zone that could have impacts worldwide, while Japan has fallen into a technical recession,” OECD Secretary-General Angel Gurría said in a written statement.

“Furthermore, diverging monetary policies could lead to greater financial volatility for emerging economies, many of which have accumulated high levels of debt,” Gurría added.

Global GDP growth is projected to reach a 3.3 percent in 2014 before accelerating to 3.7 percent in 2015 and 3.9 percent in 2016, according to the Outlook. This pace is modest compared with the pre-crisis period and somewhat below the long-term average, said the OECD.

The euro area is projected to grow by 0.8 percent in 2014, before slight acceleration to 1.1 percent in 2015 and 1.7 percent in 2016.

“With the eurozone outlook weak and vulnerable to further bad news, a stronger policy response is needed, particularly to boost demand,” said OECD Chief Economist Catherine L Mann.

“That will mean more action by the European Central Bank and more supportive fiscal policy, so that there is space for deeper structural reforms to take hold. A Europe that is doing poorly is bad news for everyone,” Mann added.

Among the major advanced economies activity is gaining strength in the United States, which is projected to grow by 2.2 percent in 2014 and around 3 percent in 2015 and 2016. In Japan, growth was impacted by consumption tax hikes in 2014, with expected growth of only 0.4 percent in 2014, and rises modestly to 0.8 percent in 2015 and 1 percent in 2016.