The Organization for Economic Co-operation and Development (OECD) today reduced its projection of global growth this year and warned of threats to financial stability.
The OECD predicts that global growth will be the same as last year at three percent, which is the lowest in the last five years, while in November it forecast 3,3 percent. This organization states that trade and investment are weak, while low demand leads to low inflation and inadequate growth in wages and employment.
"The risks of financial instability are significant, as demonstrated by the recent decline in the value of stocks and bonds around the world," the OECD said in its latest report.
The OECD states that after this year's three percent, global growth will be 2017 percent in 3,3, while the long-term average is around 3,75 percent. The projection of growth in the USA this year has been reduced to two percent, and in Germany, the largest European economy, to 1,3 percent. In the eurozone, growth of 1,3 percent is expected.
The report states that China's growth will slow to 6,5 percent this year and 6,2 percent next year, while India will continue its strong growth of 7,4 percent this year and 7,3 percent in 2017. On the other hand, Brazil is in a deep recession and this year an additional decrease in GDP of four percent is expected.
The OECD has urged authorities around the world to act more decisively - strong fiscal measures together with structural reforms are needed to boost growth and provide a more favorable environment for innovation and change, especially in Europe.
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