OECD cuts global growth outlook as developing economies falter

Advanced economies will increasingly have to drive the recovery as formerly fast-growing developing economies falter, the OECD said on Tuesday, as it downgraded its outlook for growth.

The Paris-based Organisation for Economic Cooperation and Development said it has cut its 2014 world growth outlook to 3.4 per cent from 3.6 per cent.

In its latest economic outlook, the OECD cut its estimate from 3.6 per cent the last time it took the temperature of global growth, in November.

"We are still not out of the woods yet, because what we are seeing is better numbers, but the downside risks are still there," OECD Secretary general Angel Gurria said. "Low growth is still there, very high unemployment numbers are still there."

In addition, emerging-market economies such as China and Russia are becoming a drag on the global economy, though they should not derail the recovery that they had been driving until recently, Mr Gurria said.

The OECD forecast that the US economy, the world’s biggest, would grow 2.6 per cent this year. That was down from its forecast of 2.9 per cent in November, after bad weather caused a rough start to the year.

Long a laggard in the global economy, the euro area was expected to grow 1.2 per cent this year, marginally better than the 1 per cent the OECD had projected in November.

Reuters