Upload
wendy-stokle
View
9.491
Download
0
Tags:
Embed Size (px)
Citation preview
US economy accelerating
but not yet in top gear
25th November 2014
Catherine L. Mann OECD Chief Economist
OECD Economic Outlook US and Global Briefing
The global economy is stuck in low gear
3
World GDP growth
Per cent, seasonally adjusted annualised rate
Source: November 2014 Economic Outlook database.
-8
-6
-4
-2
0
2
4
6
8
-8
-6
-4
-2
0
2
4
6
8
Average (1995-2007)
Trade growth has been weak
4
Trade intensity1
Index, 1990=100
1. Index of sum of exports and imports as a ratio of GDP. Source: November 2014 Economic Outlook database.
50
100
150
200
250
300
350
United States Trend (1990-2007)
50
100
150
200
250
300
350
Japan
50100150200250300350
European Union
50100150200250300350
BRIICS
5
Demand patterns are diverging
.
Non-residential investment per capita
Index, 2005 = 100
Private consumption per capita
Index, 2005 = 100
80
90
100
110
120
80
90
100
110
120 United States Euro area Japan
85
90
95
100
105
110
115
85
90
95
100
105
110
115United States Euro area Japan
Source: OECD National Accounts database; November 2014 Economic Outlook database; and OECD calculations.
6
Trends are also diverging among emerging economies
.
GDP per capita Volume, 2005=100
Source: OECD National Accounts database; November 2014 Economic Outlook database; IMF WEO database; Central Statistical Organisation, India; and OECD calculations.
80
100
120
140
160
180
200
220
240
80
100
120
140
160
180
200
220
240
China
India
Brazil
Russia
Growth projections for 2015-16
GDP Volume, percentage change
7
Source: November 2014 Economic Outlook database.
Column1 2013 2014 2015 2016World 3.1 3.3 3.7 3.9
United States 2.2 2.2 3.1 3.0Euro area -0.4 0.8 1.1 1.7
Japan 1.5 0.4 0.8 1.0China 7.7 7.3 7.1 6.9India 4.7 5.4 6.4 6.6Brazil 2.5 0.3 1.5 2.0Russia 1.3 0.3 0.0 1.6
Global risks are on the downside
There is a growing risk of euro area stagnation
Diverging monetary policies could lead to more volatility for emerging economy
Advanced economy debt levels are high and credit growth in some emerging economies has been rapid
Potential growth rates could fall further
8
Monetary, fiscal and structural policies need to support growth
Monetary, fiscal and structural policies are complementary tools
Monetary policy needs to remain accommodative in most countries, and more aggressive QE is needed in the euro area
Progress on fiscal consolidation has left room in many economies -- including in the euro area -- to ease the drag of fiscal policy on demand
Ambitious structural reforms are needed to boost investment, trade and job creation
9
11
Output is expected to accelerate relative to its trend over the past few quarters
GDP
Volume, 2009=100 Real GDP growth
Per cent, annual rate
12
Consumption accelerates modestly but all pistons are not firing
14
Business investment looks mediocre
15
Residential investment accelerates but remains well below cruising speed
16
Trade growth remains slow mirroring the global pattern
17
The drag from fiscal consolidation is waning
Government spending Contribution to GDP growth 4 quarter moving average
Government fixed assets Annual growth rate
real net fixed assets (excluding defense)
19
Declines in unemployment running ahead of the recovery
21
Labour market tightening should put upward pressure on wages and demand
22
Inflation rises but not achieve target
Risks
Acceleration of aggregate demand may not materialise
Normalisation of monetary policy could create financial market tensions
Upside and downside risks from the process of monetary policy normalisation
Household consumption and business investment may pick up more quickly than expected
23
Monetary and fiscal policy
Fiscal policy should focus on addressing longer-term pressures associated with healthcare spending and old age pensions
Assuming the recovery remains on track, policy rates should be gradually raised as labour-market slack is eliminated and wage growth becomes more apparent
Monetary policy rates should remain at their current low level through mid-2015
The authorities should facilitate infrastructure spending
24
25
More information…
data visualization tool
OECD Economic Outlook, November 2014
• Website with additional information
• Read this publication online
• Compare your country with OECD data
www.oecd.org/eco/economicoutlook.htm
OECD OECD Economics
Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.