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15th September 2014, Paris 
Rintaro Tamaki, Deputy Secretary-General & Acting Chief Economist 
OECD INTERIM GLOBAL 
ECONOMIC ASSESSMENT 
http://www.oecd.org/economy/economicoutlook.htm
Global growth, though bumpy, continues at a moderate pace 
2 
World GDP 
Percentage change, seasonally adjusted annualised rate 
Source: OECD National Accounts database. 
Global PMI Index 
Note: Values above 50 indicate expansion. 
Source: Markit. 
0 
1 
2 
3 
4 
5 
0 
1 
2 
3 
4 
5 
48 
50 
52 
54 
56 
58 
48 
50 
52 
54 
56 
58
Trade growth remains sluggish 
Volumes, year-on-year percentage change 
Global trade in goods and services 
Source: OECD National Accounts database. 
3 
-20 
-15 
-10 
-5 
0 
5 
10 
15 
20 
-20 
-15 
-10 
-5 
0 
5 
10 
15 
20 
Pre-crisis average (1990-2007)
Labour market slack is still substantial in the advanced economies 
OECD employment 
Per cent of working age population 
Real wages and labour productivity 
Annualised percentage change, Q2 2009 – Q1 2014 4 
Note: Real wage is employee compensation divided by total hours worked in the economy, deflated by the CPI. Labour productivity is real GDP divided by hours worked. 
Source: OECD calculations based on quarterly national accounts and OECD May 2014 Economic Outlook database . 
Source: OECD May 2014 Economic Outlook database . 
53 
54 
55 
56 
57 
53 
54 
55 
56 
57 
-0.5 
0.0 
0.5 
1.0 
1.5 
-0.5 
0.0 
0.5 
1.0 
1.5 
United States 
Japan 
Euro area 
Real wage 
Labour productivity
There are signs of a stabilisation of growth rates in emerging market economies 
5 
GDP growth and Composite PMI 
-6 
-4 
-2 
0 
2 
4 
6 
8 
10 
12 
14 
40 
42 
44 
46 
48 
50 
52 
54 
56 
58 
60 
Per cent 
Index 
Emerging Markets PMI (LHS) 
BRIICS GDP growth (s.a.a.r.; RHS) 
Note: PMI values above 50 indicate expansion. 
Source: HSBC; Markit; OECD National Accounts database; and OECD calculations.
OECD interim forecasts -- 
GDP growth in the major economies 
6 
0 
1 
2 
3 
4 
5 
6 
7 
8 
9 
0 
1 
2 
3 
4 
5 
6 
7 
8 
9 
China 
India 
Brazil 
Per cent 
Per cent 
2013 
2014 
2015 
Source: OECD Interim Forecast. 
-1.0 
-0.5 
0.0 
0.5 
1.0 
1.5 
2.0 
2.5 
3.0 
3.5 
-1.0 
-0.5 
0.0 
0.5 
1.0 
1.5 
2.0 
2.5 
3.0 
3.5 
United States 
Euro area 
Japan 
Per cent 
Per cent 
2013 
2014 
2015
GDP growth 
Per cent 7 
OECD interim forecasts 
Note: GDP at market value adjusted for working days. For Germany and India, this measure may differ from national headline measures. 
Column1201320142015United States2.22.13.1Euro area-0.40.81.1Japan1.60.91.1Germany 0.21.51.5France0.40.41.0Italy-1.8-0.40.1United Kingdom1.83.12.8Canada2.02.32.7China7.77.47.3India4.75.75.9Brazil2.50.31.4
The bullishness of financial markets belies the presence of substantial risks 
. 
Share prices 
Indices, Jan 2005 = 100 
Implied share price volatility 
Per cent 8 
Note: Series shown are the MSCI World and Emerging Markets indices. The MSCI World Index covers 23 developed markets and the MSCI Emerging Markets Index 23 emerging markets. 
Source: Datastream. 
Source: Datastream. 
0 
10 
20 
30 
40 
50 
60 
70 
80 
90 
100 
0 
10 
20 
30 
40 
50 
60 
70 
80 
90 
100 
United States: 
VIX index 
Euro area: 
VSTOXX index 
0 
50 
100 
150 
200 
250 
0 
50 
100 
150 
200 
250 
Developed markets 
Emerging markets
In the euro area, projected growth is too weak to reduce economic slack 
Output gap Per cent of potential output 
. 
9 
Source: OECD May 2014 Economic Outlook; OECD Interim Forecasts, and OECD calculations. 
-4 
-3 
-2 
-1 
0 
-4 
-3 
-2 
-1 
0 
2012 
2013 
2014 
2015
The OECD does not project euro area deflation, but the risk has risen 
Consumer price inflation 
Year-on-year, per cent 10 
Source: Eurostat. 
-4 
-3 
-2 
-1 
0 
1 
2 
3 
4 
5 
-4 
-3 
-2 
-1 
0 
1 
2 
3 
4 
5 
Euro area 
Germany 
France 
Italy 
Spain 
Greece
Global policy requirements 
. 
Ease structural constraints to economic growth 
Tailor monetary policy to country-specific circumstances, which are diverging 
Ensure that public debt burdens are sustainable – for many countries, that means further fiscal consolidation 
11
The euro area needs more monetary support 
. 
Recent ECB action is welcome, but further measures, including QE, are warranted 
Use all flexibility allowed under the union’s fiscal rules 
The completion of the banking union and the effective and credible assessment of banks are both critical 
12 
Other major central banks have eased more aggressively 
Central bank assets as per cent of GDP 
0 
10 
20 
30 
40 
50 
60 
0 
10 
20 
30 
40 
50 
60 
United States 
Euro area 
Japan 
Source: Datastream.
Japan’s multi-pronged approach should be maintained 
. 
Continue monetary expansion to achieve the 2% inflation target 
Follow through on second consumption tax hike to advance fiscal consolidation; use short-term measures, particularly further monetary expansion, to cushion negative effects 
Legislate and implement announced structural reform 
Wages are now picking up 
Hourly earnings index, 2010 = 100 13 
98 
99 
100 
101 
102 
103 
98 
99 
100 
101 
102 
103 
Source: OECD Main Economic Indicators.
US policy stimulus is working 
. 
Proceed with the intended withdrawal of monetary stimulus 
Focus fiscal policy on medium-/ long-term sustainability 
Use structural policies to pursue more inclusive growth, and increase public investment 
14 
Nonfarm payroll growth is around 
pre-crisis levels 
Thousands, 3-month moving average 
-800 
-600 
-400 
-200 
0 
200 
400 
-800 
-600 
-400 
-200 
0 
200 
400 
Pre-crisis average 
(2004-2007) 
Source: U.S. Bureau of Labor Statistics.
China faces challenges in achieving an orderly slowdown 
. 
Ensuring an orderly real estate market correction is critical 
Easing inflation provides ample room for policy stimulus if needed 
Further efforts to make financial regulation more effective are needed 
15 
Credit growth is being reined in 
Year on year, per cent 
Note: Non-bank credit includes bankers acceptances, trust loans, entrusted loans and net corporate bond financing. 
Source: CEIC. 
0 
15 
30 
45 
60 
75 
10 
14 
18 
22 
26 
30 
Total social financing (LHS) 
Bank lending (LHS) 
Non-bank credit (RHS)
India has the opportunity to achieve faster and more inclusive growth 
. 
Improve fiscal consolidation by shifting from subsidies to investment in social and physical infrastructure 
Control inflation and improve financial stability 
Improve infrastructure, simplify labour laws and pursue tax reform 
Growth has bottomed out 
Real GDP, year-on-year percentage change 16 
0 
2 
4 
6 
8 
10 
12 
14 
0 
2 
4 
6 
8 
10 
12 
14 
Source: OECD National Accounts database.
Brazil needs to revive investment 
. 
Ensure inflation returns to the inflation target. 
Increase the primary surplus as the economy recovers. 
Pursue reforms that support investment, including tax simplification, accelerated infrastructure spending and lower trade barriers. 
Investment is weak 
Investment volumes, year-on-year percentage change 17 
Source: Instituto Brasileiro de Geografia e Estatística. 
-20 
-10 
0 
10 
20 
30 
40 
-20 
-10 
0 
10 
20 
30 
40
Key messages 
The moderate economic expansion is forecast to continue in most major advanced and emerging economies 
The euro area stands out as suffering from weak demand and risking prolonged stagnation 
Macroeconomic policy needs across countries are diverging 
Structural reforms are key to achieving more satisfactory global growth rates 
18
Follow us on twitter: 
For more information see the Economic Outlook webpage 
at http://www.oecd.org/economy/economicoutlook.htm 
OECDeconomy 
Email: eco.outlook@oecd.org 
Further information 
- 
Download the data 
- 
Watch the press conference 
- 
Interactive dynamic charts

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OECD Interim Global Economic Assessment

  • 1. 15th September 2014, Paris Rintaro Tamaki, Deputy Secretary-General & Acting Chief Economist OECD INTERIM GLOBAL ECONOMIC ASSESSMENT http://www.oecd.org/economy/economicoutlook.htm
  • 2. Global growth, though bumpy, continues at a moderate pace 2 World GDP Percentage change, seasonally adjusted annualised rate Source: OECD National Accounts database. Global PMI Index Note: Values above 50 indicate expansion. Source: Markit. 0 1 2 3 4 5 0 1 2 3 4 5 48 50 52 54 56 58 48 50 52 54 56 58
  • 3. Trade growth remains sluggish Volumes, year-on-year percentage change Global trade in goods and services Source: OECD National Accounts database. 3 -20 -15 -10 -5 0 5 10 15 20 -20 -15 -10 -5 0 5 10 15 20 Pre-crisis average (1990-2007)
  • 4. Labour market slack is still substantial in the advanced economies OECD employment Per cent of working age population Real wages and labour productivity Annualised percentage change, Q2 2009 – Q1 2014 4 Note: Real wage is employee compensation divided by total hours worked in the economy, deflated by the CPI. Labour productivity is real GDP divided by hours worked. Source: OECD calculations based on quarterly national accounts and OECD May 2014 Economic Outlook database . Source: OECD May 2014 Economic Outlook database . 53 54 55 56 57 53 54 55 56 57 -0.5 0.0 0.5 1.0 1.5 -0.5 0.0 0.5 1.0 1.5 United States Japan Euro area Real wage Labour productivity
  • 5. There are signs of a stabilisation of growth rates in emerging market economies 5 GDP growth and Composite PMI -6 -4 -2 0 2 4 6 8 10 12 14 40 42 44 46 48 50 52 54 56 58 60 Per cent Index Emerging Markets PMI (LHS) BRIICS GDP growth (s.a.a.r.; RHS) Note: PMI values above 50 indicate expansion. Source: HSBC; Markit; OECD National Accounts database; and OECD calculations.
  • 6. OECD interim forecasts -- GDP growth in the major economies 6 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 China India Brazil Per cent Per cent 2013 2014 2015 Source: OECD Interim Forecast. -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 United States Euro area Japan Per cent Per cent 2013 2014 2015
  • 7. GDP growth Per cent 7 OECD interim forecasts Note: GDP at market value adjusted for working days. For Germany and India, this measure may differ from national headline measures. Column1201320142015United States2.22.13.1Euro area-0.40.81.1Japan1.60.91.1Germany 0.21.51.5France0.40.41.0Italy-1.8-0.40.1United Kingdom1.83.12.8Canada2.02.32.7China7.77.47.3India4.75.75.9Brazil2.50.31.4
  • 8. The bullishness of financial markets belies the presence of substantial risks . Share prices Indices, Jan 2005 = 100 Implied share price volatility Per cent 8 Note: Series shown are the MSCI World and Emerging Markets indices. The MSCI World Index covers 23 developed markets and the MSCI Emerging Markets Index 23 emerging markets. Source: Datastream. Source: Datastream. 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 United States: VIX index Euro area: VSTOXX index 0 50 100 150 200 250 0 50 100 150 200 250 Developed markets Emerging markets
  • 9. In the euro area, projected growth is too weak to reduce economic slack Output gap Per cent of potential output . 9 Source: OECD May 2014 Economic Outlook; OECD Interim Forecasts, and OECD calculations. -4 -3 -2 -1 0 -4 -3 -2 -1 0 2012 2013 2014 2015
  • 10. The OECD does not project euro area deflation, but the risk has risen Consumer price inflation Year-on-year, per cent 10 Source: Eurostat. -4 -3 -2 -1 0 1 2 3 4 5 -4 -3 -2 -1 0 1 2 3 4 5 Euro area Germany France Italy Spain Greece
  • 11. Global policy requirements . Ease structural constraints to economic growth Tailor monetary policy to country-specific circumstances, which are diverging Ensure that public debt burdens are sustainable – for many countries, that means further fiscal consolidation 11
  • 12. The euro area needs more monetary support . Recent ECB action is welcome, but further measures, including QE, are warranted Use all flexibility allowed under the union’s fiscal rules The completion of the banking union and the effective and credible assessment of banks are both critical 12 Other major central banks have eased more aggressively Central bank assets as per cent of GDP 0 10 20 30 40 50 60 0 10 20 30 40 50 60 United States Euro area Japan Source: Datastream.
  • 13. Japan’s multi-pronged approach should be maintained . Continue monetary expansion to achieve the 2% inflation target Follow through on second consumption tax hike to advance fiscal consolidation; use short-term measures, particularly further monetary expansion, to cushion negative effects Legislate and implement announced structural reform Wages are now picking up Hourly earnings index, 2010 = 100 13 98 99 100 101 102 103 98 99 100 101 102 103 Source: OECD Main Economic Indicators.
  • 14. US policy stimulus is working . Proceed with the intended withdrawal of monetary stimulus Focus fiscal policy on medium-/ long-term sustainability Use structural policies to pursue more inclusive growth, and increase public investment 14 Nonfarm payroll growth is around pre-crisis levels Thousands, 3-month moving average -800 -600 -400 -200 0 200 400 -800 -600 -400 -200 0 200 400 Pre-crisis average (2004-2007) Source: U.S. Bureau of Labor Statistics.
  • 15. China faces challenges in achieving an orderly slowdown . Ensuring an orderly real estate market correction is critical Easing inflation provides ample room for policy stimulus if needed Further efforts to make financial regulation more effective are needed 15 Credit growth is being reined in Year on year, per cent Note: Non-bank credit includes bankers acceptances, trust loans, entrusted loans and net corporate bond financing. Source: CEIC. 0 15 30 45 60 75 10 14 18 22 26 30 Total social financing (LHS) Bank lending (LHS) Non-bank credit (RHS)
  • 16. India has the opportunity to achieve faster and more inclusive growth . Improve fiscal consolidation by shifting from subsidies to investment in social and physical infrastructure Control inflation and improve financial stability Improve infrastructure, simplify labour laws and pursue tax reform Growth has bottomed out Real GDP, year-on-year percentage change 16 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 Source: OECD National Accounts database.
  • 17. Brazil needs to revive investment . Ensure inflation returns to the inflation target. Increase the primary surplus as the economy recovers. Pursue reforms that support investment, including tax simplification, accelerated infrastructure spending and lower trade barriers. Investment is weak Investment volumes, year-on-year percentage change 17 Source: Instituto Brasileiro de Geografia e Estatística. -20 -10 0 10 20 30 40 -20 -10 0 10 20 30 40
  • 18. Key messages The moderate economic expansion is forecast to continue in most major advanced and emerging economies The euro area stands out as suffering from weak demand and risking prolonged stagnation Macroeconomic policy needs across countries are diverging Structural reforms are key to achieving more satisfactory global growth rates 18
  • 19. Follow us on twitter: For more information see the Economic Outlook webpage at http://www.oecd.org/economy/economicoutlook.htm OECDeconomy Email: eco.outlook@oecd.org Further information - Download the data - Watch the press conference - Interactive dynamic charts