Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Economic-Outlook-97-investment-the-way-out-of-the-b-minus-economy

75,883 views

Published on

Economic-Outlook-97-investment-the-way-out-of-the-b-minus-economy

Published in: Economy & Finance
  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD FULL BOOKS INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • For genuine and Serious inquiry of any form of banking instrument (BG/SBLC/MTN/DLC/LC) Please Contact : Mr. Mahendra Jain,Email :Draj.bgbroker@gmail.com,Skype ID: Jaindra.bglease
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

Economic-Outlook-97-investment-the-way-out-of-the-b-minus-economy

  1. 1. Investment and the B- global economy: how to get a better ‘grade’ Paris, 3rd June 2015 10h20 Paris time Catherine L. Mann OECD Chief Economist Release of the June 2015 OECD Economic Outlook
  2. 2. Key messages Global growth improving, but still moderate – the B- world economy could do better Monetary easing (accompanied by currency depreciation in some countries), reduced fiscal drag and low oil prices underpin the projected improvement Stronger investment is needed to strengthen demand, halt the slowdown in potential growth, improve diffusion of technology and increase employment Balanced packages of mutually reinforcing monetary, fiscal and structural policies, undertaken collectively, are needed to get the strong, inclusive, sustainable growth that would earn the world economy an A
  3. 3. Global growth is projected to strengthen, though remaining below long-run averages Real GDP growth Per cent, seasonally adjusted annualised rate Source: June 2015 Economic Outlook database. Reduced fiscal drag—except Japan Monetary easing— for 50% of global GDP Currency depreciation— except US Lower oil prices – adds 0.5% to level of global GDP 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 World OECD Non-OECD 1995-2007 average
  4. 4. Growth projections for 2015-16 GDP Volume, percentage change June 2015 OECD Economic Outlook projections. Column1 2014 2015 2016 World 3.3 3.1 3.8 United States 2.4 2.0 2.8 Euro area 0.9 1.4 2.1 Japan -0.1 0.7 1.4 China 7.4 6.8 6.7 India 7.2 6.9 7.6 Brazil 0.2 -0.8 1.1 Russia 0.6 -3.1 0.8
  5. 5. 1. BRIIS comprises Brazil, India, Indonesia, Russia and South Africa, weighted by GDP at PPP exchange rates . Source: November 2014 & June 2015 OECD Economic Outlook database. Projected GDP growth, change between November 2014 and June 2015 Percentage points Projections mostly revised down since November Economic Outlook -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 World United States Euro area Japan BRIIS China 2015 2016 Upward revisionDownward revision 1
  6. 6. Some of the downward revision reflects pronounced weakness in Q1 2015 Real GDP growth Per cent, seasonally adjusted annualised rate Source: June 2015 Economic Outlook database. A further decline in China’s growth rate Surprisingly sharp Q1 slowdown in the United States Result: slower growth of the world economy than in any quarter since the crisis -8 -4 0 4 8 12 World United States China
  7. 7. Low oil prices will boost consumption and investment in the major economies . Estimated effect of oil price decline since mid-2014 after two years if Brent remains at USD 65 per barrel Impact on level of real GDP in 2016, per cent Note: Simulation uses price difference of USD 20 per barrel relative to baseline in 2014Q3, USD 30 in 2014Q4, USD 40 in 2015Q1 and USD 35 from 2015Q2 onward. Source: International Energy Agency; International Monetary Fund; and OECD calculations. -1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 -1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 OECD net importers United States Non-OECD net importers World Non-OECD net exporters OECD net exporters
  8. 8. Fiscal policy will exert less drag on growth Change in underlying primary balance Per cent of potential output Note: BRIICS are Brazil, China, India, Indonesia, Russia and South Africa. Source: June 2015 OECD Economic Outlook database; IMF WEO database. -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 United States Euro area Japan OECD BRIICS 2012 2013 2014 2015 2016
  9. 9. Widespread monetary easing in recent months is supportive for global demand Source: OECD calculations. Cumulative share of world GDP of countries whose central banks have eased monetary policy since November 2014 Per cent 0 10 20 30 40 50 60 0 10 20 30 40 50 60 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15
  10. 10. Depreciation has eased financial conditions but worsened foreign currency debt exposure Source: June 2015 OECD Economic Outlook database. Bilateral nominal exchange rates (USD/domestic currency) Percentage change between July 2014 and May 2015 Real effective exchange rates -35 -30 -25 -20 -15 -10 -5 0 United States China India United Kingdom Canada Mexico Japan Euro area Turkey Brazil Russia -20 -15 -10 -5 0 5 10 15 United States China India United Kingdom Canada Mexico Japan Euro area Turkey Brazil Russia
  11. 11. Advanced economy labour markets are healing, though the process is incomplete Unemployment rate Per cent of labour force Note: Real wages are nominal compensation per employee, deflated by corresponding CPI. Source: June 2015 OECD Economic Outlook database. Real wages Percentage change, seasonally adjusted annualised rate 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 United States Euro area Japan OECD -4 -3 -2 -1 0 1 2 3 4 -4 -3 -2 -1 0 1 2 3 4 United States Euro area Japan
  12. 12. Risks
  13. 13. Ordinary risks are balanced Investment growth could again fail to accelerate, but capital spending by cash-rich companies could be stronger than projected. Given uncertainty about the degree of labour market slack, wage growth in the US and Japan could be faster or slower than assumed. The effect of monetary easing in the euro area and Japan could be either stronger or weaker than projected. Oil prices could surprise on either side. Economic Outlook forecast errors for GDP Percentage points Note: Bars show the range of one-year-ahead forecast errors over 10 Economic Outlooks from 2009 to 2013. Source: June 2015 OECD Economic Outlook database. -5 -4 -3 -2 -1 0 1 2 3 4 -5 -4 -3 -2 -1 0 1 2 3 4 OECD United States Euro area Japan Average forecast error
  14. 14. … but there are a number of extraordinary risks Overshooting of a rebound from exceptionally low advanced economy bond yields Financial turmoil in emerging market economies Unfavourable resolution of Greece’s situation Sharp slowdown in China
  15. 15. Why the world economy only rates a “B-”
  16. 16. Labour market remains scarred Long-term unemployed (more than one year) Per cent of total unemployed1 1. Three-quarter moving averages, not seasonally adjusted. 2. Not in employment, education or training. Source: OECD calculations based on quarterly national labour force surveys. NEET2 rates among youth Per cent of youth population aged 15-29 0 10 20 30 40 50 60 0 10 20 30 40 50 60 United States OECD Japan Euro area Q4 2007 Q4 2014 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 Japan OECD Euro area United States Mexico Turkey 2007 2014
  17. 17. Productivity growth has slowed Labour productivity Annual average percentage change over the period Source: June 2015 OECD Economic Outlook database. -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 OECD United States Euro area Japan 1980-1994 1995-2007 2008-2010 2011-2014
  18. 18. Investment recovery lags previous cycles Business investment in different cycles Cyclical peak in OECD real business fixed investment=100 (date of peak indicated) Source: June 2015 OECD Economic Outlook database. Sluggish investment means: ● Slower potential output growth ● Labour scarring ● Stagnant incomes, rising inequality ● Slower technology diffusion from innovation frontier80 90 100 110 120 130 140 150 80 90 100 110 120 130 140 150 t 2 4 6 8 10 12 14 16 18 20 22 24 26 28 t=1973Q4 t=1981Q4 t=2000Q3 t=2008Q1 Quarters since the peak
  19. 19. Sluggish investment explains part of the slowdown in potential growth Loss in potential output relative to pre-crisis trend Percentage point difference in 2014, relative to the counter-factual Note: “Employment” is the combined contribution of changes in the NAIRU and the participation rate. Source: OECD calculations based on June 2015 Economic Outlook database. -12 -10 -8 -6 -4 -2 0 2 4 -12 -10 -8 -6 -4 -2 0 2 4 Employment Capital per worker TFP Total
  20. 20. Policies: getting to an “A”
  21. 21. Monetary policy is on track in the major economies Inflation expectations 2-3 years ahead, per cent Note: Expected average annual inflation based on inflation swaps. Source: Datastream; OECD calculations. With below-target inflation and sub-par growth almost everywhere, most central banks should maintain a supportive monetary policy Policy rates are expected to begin normalising first in the United States, which will pose challenges elsewhere Swings in commodity prices and exchange rates should trigger a policy change only if expectations are becoming de-anchored 0.0 0.5 1.0 1.5 2.0 2.5 3.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 United States Japan Euro area
  22. 22. Addressing medium-term fiscal challenges would reduce uncertainty Public debt Per cent of GDP Note: For health care expenditure, averages across countries are unweighted. BRIICS are Brazil, China, India, Indonesia, Russia and South Africa. Health care expenditure is projected with assumption that countries do not implement policies which would reduce the expenditure. Source: June 2015 Economic Outlook database; OECD Economic Policy Papers, No. 06, "Public spending on health and long-term care: a new set of projections“. Public health care expenditure pressure Percentage deviation from 2006-10 expenditure/GDP ratio 40 60 80 100 120 140 160 180 200 220 240 40 60 80 100 120 140 160 180 200 220 240 United States Japan Euro area OECD 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 OECD BRIICS 2030 2060
  23. 23. Structural policy can help to revive investment, supporting inclusive growth Estimated impact of shocks on investment Percentage change after 5 years 1. 16% reduction in OECD index of regulation in energy, transport and communications (ETCR) over 5 years, equivalent to the average pace of reduction among 15 OECD countries during the period 1993-2013. 2. Two-standard-deviation reduction in policy uncertainty corresponds to a 26% reduction. Source: OECD calculations. Diffusion of innovationInvestment Potential growth Demand, jobs 0.0 0.2 0.4 0.6 0.8 1.0 1.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 Product market liberalisation Two-standard- deviation reduction in policy uncertainty 1% increase in foreign demand 1% increase in domestic demand 1 2
  24. 24. Key messages Global growth improving, but still moderate – the B- world economy could do better Monetary easing (accompanied by currency depreciation in some countries), reduced fiscal drag and low oil prices underpin the projected improvement Stronger investment is needed to strengthen demand, halt the slowdown in potential growth, improve diffusion of technology and increase employment Balanced packages of mutually reinforcing monetary, fiscal and structural policies, undertaken collectively, are needed to get the strong, inclusive, sustainable growth that would earn the world economy an A

×