AS per OECD's
latest Economic Outlook, the global economy is
gradually gaining momentum, but the recovery is fragile, extremely uneven across
different regions and could be derailed by the crisis in the euro
area.
“With slow growth, high unemployment and limited
room for manoeuvre regarding macroeconomic policy space, structural reforms are
the short-run remedy to spur growth and boost confidence”, OECD
Secretary-General Angel Gurría said during the launch of the report in
Paris.
GDP growth across the OECD is projected to slow from an annual
rate of 1.8% in 2011 to 1.6% in 2012, before recovering to 2.2% in 2013,
according to the Outlook.
Private sector demand is expected to push
activity up in the United States by 2.4% this year and by a further 2.6% in
2013. In Japan, GDP is expected to expand by 2% in 2012 and 1.5% in 2013. Euro
area GDP is forecast to contract by 0.1% this year, before picking up to 0.9% in
2013.
Activity remains strong in most emerging-market economies, but
policy challenges vary, with inflation acting as a drag on real incomes in some,
while it remains subdued in others. Lower inflation provides policy space in
some countries that could be used to sustain activity.
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