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Benedicte Gravrand, Opalesque Geneva: - According to the OECD’s latest economic outlook, out last week, "a variety of factors account for the different speeds at which growth is projected to strengthen in advanced economies."
These factors include household deleveraging; health of the financial system; fiscal consolidation; and monetary policy stance (generally supportive but with some variation).
Advanced economies’ growth should strengthen gradually past mid-2013 and through 2014, thanks to monetary policies, better financial market conditions and increased confidence. That is, if everything stays the same.
The country that will mostly benefit from the upturn is the United States, whereas the euro area’s growth will continue to be limited by its own crisis and fiscal and credit issues. Japan will see an irregular growth pattern following its recent policies.
The overall pattern of growth within emerging market economies will be modest, but China will lead and other countries will follow, limited by structural factors and in some cases, stagflationary tendencies.
Labour markets should firm in the U.S. and Japan but unemployment may continue to rise in the euro area, says the OECD.
Inflation is expected to go up a bit in the U.S., as well as Japan. But it should remain low in the euro area, and vary across the large emerging markets.
As for monetary policy, the OECD believes it needs to remain easy in the U.S., and asset purchases be reduce...................... To view our full article Click here
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