Wednesday, May 25, 2011

Global Recovery Firmly Underway, But Surrounded by Risks (GDP Charts, Video) *OECD Economic Outlook*

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OECD: Organisation for Economic Co-operation and Development


OECD Economic Outlook and Forecast

Official Statement by the Organisation for Economic Co-operation and Development (May 24, 2011) The global recovery is firmly under way, but is taking place at different speeds across countries and regions, according to the OECD’s latest Economic Outlook. Historically high unemployment remains among the most pressing legacies of the crisis. It should prompt countries to improve labour market policies that boost job creation and prevent today’s high joblessness from becoming permanent, the report said. World gross domestic product (GDP) is projected to increase by 4.2% this year and by 4.6% in 2012. Across OECD countries GDP is projected to rise by 2.3% this year and by 2.8% in 2012, in line with the previous forecasts of November 2010.

Risks Remain High
■ Upside risks
Stronger-than-projected final demand momentum
Additional short-term impacts from structural reform
■ Downside risks
Renewed increases in commodity prices
Deeper-than-projected slowdown in China
Continuing concern about public debt sustainability in some OECD countries
Lingering weakness in property markets
Ongoing financial fragility in the euro area
If downside risks interact, their cumulative impact could weaken the recovery significantly.

OECD: The Global Recovery Is Strengthening (May 24, 2011) Global recovery is progressing, but multiple risks remain. OECD chief economist Pier Carlo Padoan talks about the Economic Outlook. For more info: www.oecd.org/oecdEconomicOutlook


OECD: GDP Growth Projections by Quarter (Chart) Below is the OECD GDP Growth Projections by Quarter for the USA, Japan, the Euro Area, and the entire OECD. These are annualized percentage growth rates. The chart is for 10 quarters, from Q3 2010 through Q4 2011. The USA lowest quarter is +1.7% in Q1 2011 and the highest is +3.4% in Q4 2012. The Japan lowest quarter is -3.7% in both Q1 and Q2 2011 and the highest is +5.3% in Q3 2011. The Euro Area lowest quarter is +1.0% in Q4 2010. The highest quarter is +3.4% in Q4 2012. The Total OECD lowest quarter is +2.0% in Q4 2010 and the highest is +3.2% in Q4 2012. Japan has a negative GDP for 3 consecutive quarters, from Q4 2010 through Q2 2011. The Q1 and Q2 2011 negative GDPs for Japan are the result of the catastrophic earthquake, tsunami, and nuclear crisis.


OECD: GDP Growth Projections by Year (Chart) Below is the OECD GDP Growth Projections by Year for the USA, Japan, the Euro Area, and the entire OECD. These are annual percentage growth rates. The chart is for 3 years: 2010, 2011, and 2012. The USA was +2.9% for 2010, a lower +2.6% in 2011, and then increases to +3.1% in 2012.  Japan was a strong +4.0% in 2010, dropping to a negative -0.9% in 2011 as a result of the catastrophic earthquake, and then rebounding to +2.2% in 2012. The Euro Area was a mediocre +1.7% in 2010, continues a flat +1.7% in 2011, and increases slightly to +2.0% in 2012. The Total OECD was an adequate +2.9% in 2010, dropping to +2.3% in 2011, and rebounding to +2.8% in 2012.


OECD: GDP Projections by Year for BRIC (Chart) Below is the OECD GDP Growth Projections by Year for the BRIC countries (Brazil, Russia, India, China). These are annual percentage growth rates. The chart is for 3 years: 2010, 2011, and 2012. Brazil was a strong +7.5% in 2010, slows to +4.1% in 2011, and then increases slightly to +4.5% in 2012.  Russia was +4.0% in 2010, increases to +4.9% in 2011, and then slows to +4.5% in 2012. India was an amazing +10.4% in 2010, slows to a still respectable +8.5% in 2011, and increases slightly to +8.6% in 2012. China was a very strong +10.3% in 2010, slows to +9.0% in 2011, and rebounding to +9.2% in 2012.



Commentary The OECD reports the global recovery is strengthening and firmly underway, but surrounded by risks. Ongoing risks include persistent high oil and commodity prices, sovereign debt sustainability (e.g., USA, UK, Greece, Ireland, Portugal, Spain), weakness in property markets (especially USA), and financial fragility in the Euro Area. The OECD also lists a "deeper-than-projected slowdown in China" as a risk (GDP projected at +10.3%, +9.0%, and +9.2% for 2010, 2011, and 2012, respectively). The OECD projections show Japan with a 2011 GDP of -0.9% for 2011, slumping due to the catastrophic earthquake. Overall, the OECD Economic Outlook is somewhat positive, but a robust recovery is not projected for the OECD.



About the OECD

The mission of the Organisation for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of people around the world. The OECD has 33 member countries, including the USA and Japan but not China and Russia. OECD brings together the governments of countries committed to democracy and the market economy from around the world to:
Support sustainable economic growth
Boost employment
Raise living standards
Maintain financial stability
Assist other countries' economic development
Contribute to growth in world trade
The Organisation provides a setting where governments compare policy experiences, seek answers to common problems, identify good practice and coordinate domestic and international policies.

The 33 OECD member countries are: Australia, Austria, Belgium, Canada, Chili, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, (South) Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States, plus the Euro Area and European Union. Accession countries are now are just the Russian Federation. Enhanced Engagement Economies are Brazil, China, India, Indonesia, and South Africa.


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* Data courtesy of the International Monetary Fund *

 
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