OECD forceasts moderate global economic growth in near future

The Organization for Economic Cooperation and Development (OECD) on Tuesday forecasted improved economic recovery in major advanced economies and diverging growth rates in emerging markets.

"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," said OECD Deputy Secretary-General and Acting Chief Economist Rintaro Tamaki while launching OECD's latest econmic outlook report.

"It is critical that advanced and emerging economies alike recognise the growing importance of structural reforms to reinvigorate growth and boost job creation," he added.

Presenting its latest Interim Economic Assessment, the Paris-based economy organization noted the expected boosted recovery stemmed from "supportive financial conditions and reduced drag from budgetary tightening."

After an exceptional cold winter that tainted economic activities, the United States would witness a 3.1 percent increase on its gross domestic product (GDP) in the second quarter of the year.

In Japan, "implementation of a higher consumption tax rate is expected to result in a surge in activity in the current quarter," which will push growth up to 4.8 percent in the first quarter 2014, while the GDP growth will shrink 2.9 percent in the second quarter before a more normal pattern of recovery gets back on track, according to the OECD.

With the continuing crisis in the eurozone, the growth rate of the single-currency bloc "still lags that of other advanced economies," where the three largest economies (Germany, France and Italy) will grow at a combined weighted average of 1.9 percent rate in the first quarter and a 1.4 percent pace in the second.

In Germany, the GDP is forecast to grow by about 3.7 percent in the first quarter and 2.5 percent in the second quarter this year, while the French economy's annualised growth rate will hover around 1 percent.

As to Italy, the figure will remain below 1 percent for each of the first two quarters, the report said.

As to emerging economies which account for over half the world economy, "some major emerging economies continue growing at a fast pace, including China, but others have lost momentum," which means that global growth remains moderate in the near term, according to OECD.