This expectation says the Organisation for Economic Co-operation and Development (OECD) Wednesday in its twice-yearly Economic Outlook. It discusses the economic developments in OECD countries and other major economies.
“The world economy is trapped in a low growth rate. There is a more coordinated use of fiscal and monetary policies needed to achieve higher growth,” said the organization.
The world economy suffers according to the OECD, with weak trade growth, low levels of investment, lagging wages and less activity in emerging economies. Added together, this leads to “modest growth” of 3 percent this year.
The organization also claims that now perhaps additional monetary policies of central banks is less effective than in the past and may even be counterproductive. “Leaning alone can not produce satisfactory growth and inflation in the monetary policy,” said the OECD.
Brexit
Furthermore, warns the organization for the consequences of any Brexit. This would be “negative economic effects for the United Kingdom, other European countries and the rest of the world.”
In an incremental update, which presented the organization in February, the OECD also went forward on an economic growth of 3 percent this year. The OECD called on world leaders to take action thereby to strengthen growth.
The US economy will grow by 1.8 percent expected this year. In 2017 this will pick up to 2.2 percent.
The euro late this year grew by 1.6 percent, followed by a plus of 1.7 percent in 2017. The 34 OECD countries will average 1.8 percent this year to improve and next year 2.1 percent
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