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Oecd Cuts Global Economic Growth Forecasts

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The global recovery may be slowing faster than previously thought, the Organisation for Economic Co-operation and Development warned today as it cut its growth forecasts for the second half of the year. The Paris-based organisation also called for further stimulus measures if the slowdown proves more than temporary.

The G7 industrialised nations are now expected to grow 1.5% on an annualised basis in the second half of this year, down from the 1.75% forecast in May.

"The uncertainty is caused by a combination of both positive and negative factors," said OECD chief economist Pier Carlo Padoan. "But it is unlikely that we are heading into another downturn."

Growth is weakening in the world's rich economies, and further monetary stimulus might be needed in the form of quantitative easing and commitment to close-to-zero interest rates if the slowdown proves more than momentary, the OECD said. Plans to bring looming budget deficits under control through public spending cuts and tax rises "could be delayed".

The OECD forecast growth across the G7 to average an annualised 1.4% in the third quarter and 1% in the fourth, down from 3.2% in the first quarter and 2.5% in the second.

The US is expected to grow at an annualised rate of 2% in the third quarter, slowing to 1.2% in the fourth, after 1.6% in the second quarter and 3.7% in the first three months of the year. In Japan, GDP growth is forecast at 0.7% in the fourth quarter after 0.6% in the third.

The UK is set to grow at an annualised rate of 2.7% in the third quarter, slowing to 1.5% in the final three months of the year.

"Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated," the OECD said.

"It is not yet clear whether the loss of momentum in the recovery is temporary … or whether it signals greater underlying weaknesses in private spending at a time when public support is being removed."

Damn those computer models appear to be flawed, once more the guesses appear to be wrong.

Luckily the experts who created these models haven't revised the figures too substantially... :ph34r:

Go recovery!

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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