Hints of cautious optimism in the latest OECD assessment of the state of the global economy. The organisation expects economic activity in OECD countries to gradually pick up over the coming two years. However, the pace of recovery won’t be the same everywhere, and unemployment will remain high.
Overall, GDP in OECD countries is projected to rise by 2.3% next year and 2.8% in 2012. With an expansion of 2.2% in 2011, growth is forecast to be faster in the United States than in either the Euro area or Japan, which are both tipped for growth of 1.7%. Looking a little further ahead, the US expansion is forecast to rise to 3.1% in 2012, against 2% in the Euro area and 1.3% in Japan.
Despite the relatively upbeat message, the OECD is still strongly concerned about a number of factors that threaten the recovery. Among the most significant are a widening in global imbalances, which helped fuel the crisis in the first place. These could be exacerbated by uneven growth in the OECD area, as well as between the OECD and emerging economies, which are expected to perform even more strongly than the developed OECD countries.
Other potential problems include the possibility of further falls in house prices, especially in the US and the UK, high sovereign debt in some countries and possible abrupt reversals in government bond yields.
Click here for lots more coverage of the latest OECD Economic Outlook, including a webcast of the launch (starting 10am GMT, Thursday 18 November).