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OECD Optimistic About Economic Growth for US, Europe

The Organization for Economic Cooperation and Development is offering a generally optimistic forecast for top world economies, revising growth estimates upwards in 2010 for the United States and Europe. But the OECD also warned of potential problems.

The latest report by the Paris-based Organization for Economic Cooperation and Development offered some good news, notching up previous expectations for world growth overall in 2010 to 4.6 percent, compared to a previous estimate of only 3.4 percent.

The OECD also revised upward this year's expected growth for the United States and the 16 European countries sharing the euro currency - to 3.2 percent and 1.2 percent, respectively.

And while employment prospects for the OECD's 31 members are not exactly sunny - about 16 million people lost their jobs during the past two years - it is less grim than previously thought.

OECD's chief economist Pier Carlo Padoan:

"Growth is actually stronger than we anticipated in the advanced economies. It is benefitting from strong growth in emerging economies and from a strong rebound in trade," he said.

But the OECD report also points to worrying signals. Asian economies risk overheating. Japan must curb its spending and cut its debt. And it describes U.S. fiscal policies - which include billions of dollars of stimulus measures - as unsustainable.

Padoan says the shaky economies of Greece and several other European nations are among the biggest concern.

"But more seriously, the challenge we face is crisis in sovereign debt markets, which has originated in some euro area countries but has spread to other areas and needs to be addressed very forcefully," said Padoan.

And as member states emerge from the financial downturn, the OECD is calling for them to cut their debts and contain instability in the financial markets.