News / Economy

OECD: Emerging Economies Holding Back Global Recovery

FILE - An electronic screen and buildings are seen amid heavy smog at the financial district of Pudong in Shanghai, Dec. 6, 2013.
FILE - An electronic screen and buildings are seen amid heavy smog at the financial district of Pudong in Shanghai, Dec. 6, 2013.
Reuters
The recovery in developed economies is on track although slowing activity in big emerging markets means global growth will be only moderate at best in the near term, the Paris-based Organization for Economic Cooperation and Development said on Tuesday.

Exceptionally bad winter weather in North America and a sales tax hike in Japan are also disrupting the pace of recovery, according to OECD said.

Against that backdrop, the OECD urged the European Central Bank and the Bank of Japan to keep up their monetary stimulus, if not increase it, while it said the U.S. Federal Reserve was right to begin winding down its bond-buying program.

“The gradual recovery in the advanced economies is encouraging, even if temporary factors have pushed down growth rates in the early months of this year, while the slowdown in emerging economies is likely to be a drag on global growth,” OECD acting chief economist Rintaro Tamaki said in a statement.

Slower growth

Growth for major advanced economies in the first half of 2014 will be slower than in the second half of 2013, but much improved from the sluggish rates of late 2012 and early 2013, the OECD said in an update of its views on the global economy.

“Given that emerging economies now account for over half the world economy, continued sub-par economic performance for several of the major EMEs [emerging market economies] is likely to mean that global growth remains only moderate in the near term,” the OECD said.

It estimated growth in the United States would slow to 1.7 percent in the first quarter from the previous three months on an annualized basis, down from 2.4 percent in the fourth quarter when exceptionally bad weather weighed on activity.

Japanese growth would surge 4.8 percent in the first quarter from the previous quarter as consumers brought forward purchases ahead of a sales tax increase on April 1.

The OECD gave its updated forecasts as part of an interim health-check for the global economy before its much more detailed Economic Outlook due in May. It did not update its estimates for U.S. and Japanese growth in the second quarter because one-off factors made it too problematic, it said.

Euro zone

Turning to Europe, the OECD saw Germany's quarter-on-quarter annualized growth rate reaching 3.7 percent in the first quarter before slowing to 2.5 percent.

France, the euro zone's second biggest economy after Germany, was seen growing only 0.7 percent in the first three months of the year, rising to 1 percent in the second quarter.

Outside the euro zone, the British economy was seen growing 3.3 percent in both the first and second quarters.

Turning to emerging market economies, the OECD said some were seeing a marked loss of momentum as capital outflows exposed vulnerabilities in some countries.

It noted that Brazil, India, South Africa and Turkey among others have been forced to raise interest rates to keep capital outflows in check.

Meanwhile, weak balance sheets in China raised the risk of a sharp slowdown there, the OECD said.

You May Like

African States Push to Keep Boko Haram Offline

Central African telecoms ministers working with Nigeria to block all videos posted by Boko Haram in effort to blunt Nigerian militant group's propaganda More

Falling Oil Prices, Internet-Savvy Youth Pose Challenge for Gulf Monarchies

Across the Gulf, younger generations are putting a strain on traditional politics More

Philippines Call Center Workers Face Challenges

Country has world’s largest business process outsourcing, or BPO, industry, employing some one-million workers More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8896
JPY
USD
119.26
GBP
USD
0.6475
CAD
USD
1.2451
INR
USD
61.816

Rates may not be current.