Oecd Cuts 2015 Global Growth Estimate To 3.1 Percent

- The OECD sees global growth at 3.1 percent in 2015, 0.5 percentage points lower than its previous estimate in November 2014, largely on account of the unexpected weakness seen in the first quarter of 2015, according to the OECD's latest Economic Outlook.

"Global growth is expected to pick up through 2015 and 2016 thanks to low oil prices, widespread monetary easing and a reduction in the drag from fiscal consolidation in the major economies" the OECD said in the Outlook.

The OECD lowered its 2016 global growth estimate by just 0.1 percentage point to 3.8 percent, over the same period. The OECD also cut its estimates on Turkey's GDP growth to 3.1 percent from 3.2 percent in 2015 and to 3.9 percent from 4.0 percent in 2016.

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.

“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.”

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

“To move from a 'B-minus' grade to an 'A' means boosting investment in order to create jobs and stimulate consumption” said OECD Chief Economist Catherine Mann. “It means putting in place structural policies to raise productivity and encourage competitive markets as part of a package combining monetary and fiscal policies that deliver adequate demand growth and reduce policy uncertainty.”