Hopeful indications for Europe as US leading the way on growth
Nonetheless, a slowdown in many emerging economies meant that global growth would remainsluggish, the Organisation for Economic Co-operation and Development said.
“The bottom line is that advanced economies are growing more and emerging economies are growing less,” OECD chief economistPier Carlo Padoan told Reuters.
Among major economies, the US would lead the recovery with growth this year of 1.7%, the think tank said, trimming its estimate from a May forecast of 1.9%.
Boosted by massive monetary stimulus from the central bank, Japan was seen on course for growth this year of 1.6%, unchangedfrom the OECD’s May forecast.
Meanwhile Europe, which has been a drag on growth in recent years as it struggled with its debt crisis, at last offered good news with recoveries under way in France and Germany prompting the OECDto raise its forecasts for them.
France was seen on course for growth of 0.3% this year, up from a contraction of 0.3% in the OECD’s May forecast, while Germany, which is Europe’s biggest economy, was set to grow 0.7%, up from 0.4%previously.
Outside the eurozone, Britain was seen growing 1.5%, raised sharply from a forecast of 0.8% in May.
Though major developed economies are picking up, a slowdown in manyemerging countries was likely to weigh on broader global growth, the OECD said.
China was the exception among emerging economies, with its growth forecast to accelerate over the course of the year and achieve a rate of 7.4% this year.
With the US economy on track to keep growing at a steady clip, the OECD said it was appropriate for the Federal Reserve to start slowing bond purchases, the main measure in the central bank’s exceptionally monetary easing policies.
The Fed signalled in May that it was contemplating slowing the pace of the purchases, which have been the flagship measure for reviving the world's biggest economy since the 2008-2009 financial crisis.
In the euro area, the OECD said the ECB should keep the possibility of an interest rate cut on the table in case the recovery there peters out.
With Italy’s economy forecast to contract 1.8% this year, Padoan said that the debt-laden economies of southern Europe still needed loose monetary policies there.
