The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook.
According to the outlook report, gross domestic product (GDP) growth across the 34 members of the OECD is projected to accelerate to a 2.2 percent rate in 2014 and 2.8 percent in 2015, while the world economy is expected grow at a 3.4 percent rate in 2014 and 3.9 percent in 2015, all on year-on-year basis. Among the major advanced economies, recovery is best established in the US, which is projected to grow by 2.6 percent in 2014 and 3.5 percent in 2015. The euro area will see a return of positive growth after three years of contraction, with 1.2 percent in 2014 and 1.7 percent in 2015. In Japan, growth will be dented by the launch of much-needed fiscal consolidation measures, and is expected to hover at 1.2 percent in 2014 and in 2015. On the other hand, the BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) are projected to see GDP growth of 5.3 percent this year on average and 5.7 percent in 2015. China will again have the fastest growth among these countries, with rates just below 7.5 percent in 2014 and 2015.
"Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again," said OECD secretary-general Angel Gurría. "But with the world still facing persistently high unemployment, countries must do more to enhance resilience, boost inclusiveness and strengthen job creation," Mr. Gurría said.
According to the report, unemployment has begun falling from the historic levels seen in the wake of the crisis, but more than 44 million people are projected to still be out of work across the OECD area at the end of 2015, 11.5 million more than before the crisis.
Meanwhile, the outlook draws attention to a range of positive developments as well as significant downside risks. Investment and trade are both showing signs of picking up, but growth will remain moderate by past standards. Financial conditions are improving in the advanced economies, but tighter credit and supply side bottlenecks are damping growth in emerging economies.
