Boom Doom Economy: Economic Recovery Stronger Than Projected (GDP Chart, Video) *OECD Interim Outlook*

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OECD: Organisation for Economic Co-operation and Development

OECD Interim Economic Outlook and Forecast:
Economic Growth Perspectives Strengthening As Recovery Becomes Self-Sustained

Official Statement by the Organisation for Economic Co-operation and Development (April 5, 2011) The Growth in the G7 economies outside Japan appears to be stronger than previously projected, with accelerating private sector investment and trade boosting recovery, according to new analysis from the OECD. “The outlook for growth today looks significantly better than it looked a few months back,” OECD Chief Economist Pier Carlo Padoan said during a presentation of the OECD’s latest Interim Economic Assessment. “Growth perspectives are higher all across the OECD area, and the recovery is becoming self-sustained, which means there will be less need for fiscal or monetary policy support.”

Key Points of the report are:

■ Economic growth in the G7 economies outside Japan could rise to an annualised rate of about 3% in the first half of 2011.
■ Unemployment remains problematic, with the OECD-wide unemployment rate 2 percentage points higher than at the onset of the crisis.

■ Inflationary expectations have been creeping upwards, driven by rising commodity prices, but underlying inflation rates are still low, reflecting the large excess capacity that remains in labour and product markets.
■ Instability in the Middle East and North Africa and an associated possible further increase in oil prices could act as a drag on economic activity in the near term.
■ Uncertainty stemming from sovereign debt risks in the euro area periphery could also prove problematic.
■ Non-financial corporate balance sheets look very healthy, which could add momentum to economic growth.

OECD: Momentum Building Behind Economic Recovery (April 4, 2011) OECD chief economist Pier Carlo Padoan says recovery in the major G7 economies (excluding Japan) is stronger than expected, and may no longer be dependent on fiscal and monetary stimulus. Uncertainty and downside risks remain, including impacts of the Japanese natural disasters and nuclear crisis, the risk of inflation and persistent unemployment.

OECD: GDP Growth in the G7 Economies (Excluding Japan) Below is the OECD GDP Actual and Projected by Year for the United States, Germany, France, Italy, United Kingdom, and Canada. These are annual percentage growth rates quarter on quarter (QoQ). The chart is for 8 quarters, from Q3 2009 through Q2 2011. The 2011 data is estimated.

Commentary

The OECD Interim Economic Outlook continues optimistic in reporting the global recovery is gaining strength and is becoming self-sustainable. The reconstruction by Japan as a result of the catastrophic earthquake in March 2011 has been excluded. A positive note in the global economic recovery becoming self-sustained is that the economies reviewed may no longer required monetary and fiscal stimulus.

For Q1 and Q2 in 2011 combined, Canada is projected to have the strongest GDP growth followed by the United States. France and Germany are next followed by the United Kingdom and Italy.

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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