OECD Cuts Global Growth Forecast to 3.4% from 3.6% for 2014

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Organization for Economic Cooperation and Development (OECD) (Paris, France) cut its global economic outlook from 3.6% to 3.4% for this year. In a biannual economic outlook, the OECD cut its growth forecast for Japan, the U.S., China, Russia and Turkey.

The OECD revised Russia's GDP growth forecast significantly, from 2.3% to 0.5% in 2014. "The moderate recovery that was under way at the end of 2013 has been halted by the turbulence related to the events in Ukraine," OECD said in a statement.

The OECD also cut China's growth forecast this year to 7.4%, against November's 8.2% forecast. The U.S. is forecast to grow 2.6% this year, down from 2.9% in November. Turkey's growth forecast dropped from 3.8% to 2.8% due to increasing political risks. Japan's forecast was fell to 1.2% from 1.5%.

Rintaro Tamaki, the OECD's chief economist, said that the European Central Bank must take steps to fight deflation by decreasing rates and extending monetary expansion.

"In particular, we call on the European Central Bank to take new policy actions to move inflation more decisively toward target and to be ready for additional nonconventional stimulus, if inflation were to show no clear sign of returning there," Tamaki said at an OECD meeting in Paris, France. He noted that new, longer-term funding for banks and purchases of government and company bonds, called "quantitative easing," may be necessary.

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