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Strengthening Investment Key To Improving World Economy’S B-Minus Grade, Says Oecd

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3/06/2015 - Global growth will gradually strengthen towards its pre-crisis trend rate by late 2016 as activity becomes more evenly shared across the major economies and overall external imbalances are less marked than in the run-up to 2007, according to the OECD's latest Economic Outlook.

Labour markets are gradually healing in the advanced economies and risks of deflation have receded.

But the global economy can be characterised as only achieving a muddling-through “B-minus ” grade. Global growth in the first quarter of 2015 was weaker than in any quarter since the crisis. And although this softness is seen as transitory, productivity growth continues to disappoint, reflecting in part tepid business investment which has weakened the spread of new technologies.

Weak investment in many economies is hindering an increase in consumption, job creation and wage rises, and eroding the prospects for long-term sustainable growth.

“The global economy is projected to strengthen, but the pace of recovery remains weak and investment has yet to take off” OECD Secretary-General Angel Gurría said. “The failure to trigger strong, sustainable growth has had very real costs in terms of lost jobs, stagnant living standards in advanced economies, less vigorous development in some emerging economies, and rising inequality nearly everywhere.” (read full speech)

The Outlook says increases in capital spending are needed to push economies onto a higher growth path. For policy makers, translating investment into sustained growth also requires paying attention to low-wage workers, as well as tackling the consequences of rising inequality for education, a key factor undermining growth in the longer term.

»General assessment of the macroeconomic situation

» Lifting investment for higher sustainable growth

» The B-Minus World Economy: Investment is Key to getting a Better Grade
Editorial by Catherine Mann, OECD Chief Economist

Projections for Latin American countries

Proyecciones para países latinoamericanos

» Projections in Excel or OECD.Stat

» Read the report Online


A dearth of investment by governments and business has left the global economy vulnerable to a renewed slowdown, a leading thinktank has warned as it slashed its forecasts for the United States.

The Organisation for Economic Cooperation and Development (OECD) said the recovery since the global financial crisis had been unusually weak, costing jobs, raising inequality and knocking living standards. In its latest outlook, it saw global growth gradually strengthening but not until late 2016 will it return to the average pace of pre-crisis years.

The Paris-based thinktank noted a slowdown for many advanced economies in the opening months of 2015 and singled out a sharp dip for the US, the world’s biggest economy. It cut its projection for US economic growth to 2% this year from a forecast of 3.1% made in March. For 2016, US growth is seen at 2.8%, down from the previous 3% forecast.

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organisation for economic developers say economic development is going to improve, heres that report you wanted Mr Politician, now heres our invoice.

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I think what they really mean is borrowing has to increase.

Now a days when I hear "investment" it just means borrowing to do something that may or may not payoff at some future date.

"Investment" is just away of bankers sucking more out of the economy.

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