In its latest economic outlook published on the sidelines of its Ministerial Council meeting in Paris on Wednesday 7 June, the Organisation for Economic Cooperation and Development (OECD) anticipates a slight recovery in growth at global level, but calls for efforts to be redoubled to ensure that the benefits of growth and globalisation are shared more widely.
Stronger business and consumer confidence, rising industrial production and recovering employment and trade will help to improve the growth in global GDP, which will rise from 3.0% in 2016 to 3.6% in 2018, according to the OECD.
In the major advanced economies, recovery will continue in the United States (GDP growth of 2.1% in 2017 and 2.4% in 2018), the Eurozone (1.8% in 2017 and 2018) and Japan (1.4% in 2017 and +% in 2018). For the 35 OECD countries as a whole, growth is expected to stand at 2.1% in 2017 and 2018. In the major emerging economies, growth is expected to slow in China (6.6% in 2017 then 6.4% in 2018), but speed up in India (7.3% in 2017 and 7.7% in 2018).
However, the OECD warns that its growth forecasts are still behind the pace required fully to come out of the low growth trap, explaining that certain factors could be reflected by stronger global growth than anticipated, but that there are also considerable downside risks.
Among the positive factors, the organisation highlights the ageing capital stock of companies that may spur stronger than expected replacement investment in higher-quality capital with more advanced technology, which would help to improve cyclical conditions and support a revival of investment-intensive global value chains, with knock-on benefits for internal demand.
Among the negative factors, it stresses the risks and vulnerability factors relating to the capital markets in the advanced and emerging economies, high policy uncertainty in many countries and continued low growth in wages.
The OECD also flags up the positive impact of deeper trade integration through global value chains on increasing productivity and well-being, as well as its negative impact in terms of job losses, particularly in the manufacturing sector, due in particular to the increased pressure brought to bear by technological change.
The OECD therefore stresses the need for an integrated approach to make globalisation work for all, including the adoption of measures to improve the investment climate, drive innovation and job creation and to improve the effectiveness of targeted initiatives to accompany individuals and regions that risk being left behind.
Lastly, the OECD calls for increased cooperation to plug the existing gaps in the governance of the global economy and to bring in a level playing field and higher international standards, applicable in the fields of the employment markets, the environment, social accountability, corporate governance and taxation. (Original version in French by Emmanuel Hagry)