Global growth at risk from mixed momentum: OECD
Tuesday, March 11, 2014
PARIS (AA) - The recovery seen in advanced economies is encouraging but the mixed momentum of emerging economies could hinder global growth, an international economic organizationÂ has warned.
"The gradual recovery in the advanced economies is encouraging, even if temporary factors have pushed down growth rates in the early months of this year, while the slowdown in emerging economies is likely to be a drag on global growth," saidÂ Rintaro Tamaki, deputy secretary-general ofÂ the Paris-basedÂ Organisation for Economic Co-operation and DevelopmentÂ (OECD) whileÂ presenting an economic assessment report on Tuesday.
According to the report, the recovery is advancing well in the Unites States but lags behind the euro region due to severe winter weather in North America. An anticipated April 1st rise in Japanese sales tax has also contributed to the uneven pace of growth.
The OECD -- the grouping of 34 advanced countries --Â has claimed that mixed reactions from emerging economies to tighter financial conditions have revealed themselves as dragging factors for the world economy. The largest such economy, China, keeps growing at a fast pace although changing financial conditions have stalled other emerging economies.
"With remaining fragilities in the euro area, Japan only just beginning to confront its daunting fiscal challenges and the possibility of a slowdown in China, it is critical that advanced and emerging economies alike recognize the growing importance of structural reforms to reinvigorate growth and boost job creation,"Â Tamaki said.
The organizationÂ projects that the U.S. will grow at an annualized rate of 3.1 percent in the second quarter of 2014. Japan’s annualized rate of growth for the current quarter is expected to reach 4.8 percent due to demand brought forward by consumers before the sales tax, valid through April 1 and get back on track after contraction activity which will be seen in the second quarter.
Wide disparities are still being seen in Europe. As the region's largest economy, Germany is expected to grow 3.7 percent in first quarter and 2.5 percent in second quarter while France and Italy --Â the second- and third-biggest eurozone economies --Â are expected to grow one percent and below-one percent, respectively, for first two quarters.
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