(MENAFN- The Journal Of Turkish Weekly) The Organization for Economic Cooperation and Development (OECD) on Wednesday predicted lower global growth this year on weak investment which may taint a sustainable growth outlook.
"Weak investment in many economies is hindering an increase in consumption, job creation and wage rises, and eroding the prospects for long-term sustainable growth," the OECD said.
"The global economy is projected to strengthen, but the pace of recovery remains weak and investment has yet to take off," noted Angel Gurria, OECD's Secretary-General.
"The failure to trigger strong, sustainable growth has had very real costs in terms of lost jobs, stagnant living standards in advanced economies, less vigorous development in some emerging economies, and rising inequality nearly everywhere," he added.
The Economic Outlook report projected the world economy would grow by 3.1 percent this year and by 3.8 percent in 2016, down from an initial forecast of 3.6 percent and 3.9 percent respectively due to "unexpected weakness seen in the first quarter of 2015".
The GDP growth across the OECD was expected to be at 1.9 percent in 2015, before gathering momentum to 2.5 percent for 2016.
Economy of the 19 eurozone member states would accelerate by 1.4 percent this year and by 2.1 percent in 2016 "supported by lower oil prices, currency depreciation and monetary policy stimulus," said the the report.
"Weakness in the first quarter in the United States and in many emerging economies may signal more underlying weakness than embedded in the projections," it noted, projecting the American economy to quicken by 2 percent in 2015, down from 3.1 percent previously estimated.
As to China, OECD set the country's national output at 6.8 percent in 2015 before inching down to 6.7 percent in 2016 "as the restructuring of the economy progresses, with services taking over from investment and real estate as the main driver of economic growth."
In Russia and Brazil "the recessions are projected to give way to low but positive growth in 2016," while growth in India will remain broadly stable in 2015 and 2016.
In its latest report, the OECD saw growth of the global economy gaining momentum thanks to low oil prices, widespread monetary easing and a reduction in the drag from fiscal consolidation in the major economies.
"To move from a 'B-minus' grade to an 'A' means boosting investment in order to create jobs and stimulate consumption," said OECD Chief Economist Catherine Mann.
"It means putting in place structural policies to raise productivity and encourage competitive markets as part of a package combining monetary and fiscal policies that deliver adequate demand growth and reduce policy uncertainty," she added.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.