Recovery from the Great Recession is proving to be stronger than expected and is finally becoming self-sustained, meaning it’s less and less reliant on government support, according to the OECD.
“The outlook for growth today looks significantly better than a few months back,” says Pier Carlo Padoan, the OECD’s chief economist. He attributes that to a number of factors, including increasing business confidence and a global pick up in trade.
According to forecasts in the latest OECD interim economic assessment, released this morning in Paris, the G7 countries could see annualised growth of around 3% in the first half of this year. But, unusually, these G7 figures do not include Japan. The dreadful human cost of the earthquake and tsunami has been all too apparent, but there will also be an economic price. However, says Mr. Padoan, it’s “still too early to assess the impact both on the Japanese economy and the global economy”.
There are other uncertainties too: The impact of unrest in North Africa and the Middle East on oil prices, for example, and inflation, which, although still low, is tending to creep up. And, of course, there’s unemployment: On the bright side, it’s been falling in both the United States and Europe (more so in the former than in the latter), but it still remains relatively high and looks set to stay that way for some time to come.