The Organisation for Economic Co-operation and Development (OECD) issued its new Economic Outlook, and most of its forecasts were based on rising pessimism. That cannot come as a surprise. The organization has watched the financial prospects of the European Union crater, and the looming fiscal cliff threatens any recovery in the United States. The only odd part of the forecast is that it comes so late.
The bottom line of the report:
GDP growth across the OECD is projected to match this year's 1.4% in 2013, before gathering momentum to 2.3% for 2014, according to the Outlook.
In the United States, provided the "fiscal cliff" is avoided, GDP growth is projected at 2% in 2013 before rising to 2.8% in 2014. In Japan, GDP is expected to expand by 0.7% in 2013 and 0.8% in 2014. The euro area will remain in recession until early 2013, leading to a mild contraction in GDP of 0.1% next year, before growth picks up to 1.3% in 2014.
One primary cause will be among the most difficult to solve. More than 50 million people in the OECD nations are unemployed, and there is no engine for most countries, which are gripped by slow GDP growth and austerity programs, to change that.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Economy, International Markets