The OECD Economic Outlook, released on Wednesday morning at the OECD Forum in Paris, projects economic growth for 2010 in the OECD zone of 2.7%. That’s in strong contrast to last year’s contraction of 0.6%.
But there’s substantial variation between regions in the pace of recovery. The United States is projected to see growth of 3.0% in 2010, or double the 1.5% expansion seen for Europe. Japan’s growth rate is projected at 2.7%.
Despite the recovery, unemployment remains high: Over the past two years, about 16 million people joined the ranks of the unemployed in OECD countries. However, the OECD suggests the unemployment rate may now have peaked at just over 8½%.
The OECD sees the economic outlook as “ moderately encouraging”, but, it warns, it could be jeopardized by “significant risks”. Among these are the danger of a sharp downturn in emerging economies like China and India, which are currently helping to drive the global rebound. The OECD is concerned about the potential for overheating in emerging economies, and warns that “a boom-bust scenario cannot be ruled out”.
The OECD is also concerned about the situation in Europe, notably the debt problems of a number of countries in the euro zone. Action taken by European governments and the European Central Bank have gone some way to calming market jitters, but, the OECD warns, “the region’s underlying weaknesses are far from settled”.
Find links to further coverage of the Economic Outlook