São Paulo – The Organization for Economic Co-operation and Development (OECD) issued a survey this Wednesday (18th) forecasting a modest pickup in the world economy. It says the slight rebound is fueled by falling oil prices and the relaxation of monetary policy in some of the leading economies.
The organization has reviewed ten countries plus the Eurozone and sees average growth at 4% in 2015 and 4.3% in 2016. The projections have been raised by respectively 0.1 and 0.2 percentage point from OECD’s own report from last November.
OECD notes that strong domestic consumption in the United States is growth-inducing, and this, coupled with the fact that the US dollar is appreciating against other currencies, fuels demand around the world. Moreover, the Eurozone will likely profit from the cheap oil, monetary stimuli, and the depreciation of Europe’s currency.
In Japan, fiscal and monetary stimuli underpin medium-term growth expectations; in China, a gradual slowdown is expected to continue, in keeping with the government’s set targets; whereas India, the OECD believes, will be the top growing economy among the world’s largest ones over the next two years.
Still, this scenario doesn’t guarantee that global growth will be sustained over the long haul. To this end, the OECD advises the widespread adoption of balanced fiscal and monetary policies and the implementation of structural reforms.
Brazil is the only country out of all those assessed that is believed to post negative growth this year, at -0.5%, followed by a 1.2% pickup in 2016. In addition to low commodity prices, which also affect all other commodity-exporting economies, Brazil has tightened its monetary and fiscal policies and is plagued by uncertainty on the political front. Projections for the country have been scaled back by 2 and 0.8 percentage points, respectively.
The US is seen to grow by 3.1% in 2015 and 3% in 2016; the UK, by 2.6% and 2,5%; Canada, by 2.2% and 2%; Japan, by 1% and 1.4%; the Eurozone, by 1.4% and 2%; Germany, by 1.7% and 2.2%; France, by 1.1% and 1.7%; Italy, by 0.6% and 1.3%; China, by 7% in both years; and India, by 7.7% and 8%.
Apart from Brazil, United Kingdom, Canada and China also had their growth forecasts reduced.
*Translated by Gabriel Pomerancblum
