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The OECD has predicted South Korea’s gross domestic product will grow from 2.6% to 2.8% in 2018.
The OECD has predicted South Korea’s gross domestic product will grow from 2.6% to 2.8% in 2018.

World Growth Gaining Speed

Although modest growth is projected, the OECD warned more needs to be done for the world economy to emerge from its “low growth trap”
The OECD is projecting an increase in trade and investment with firmer demand in Asia

World Growth Gaining Speed

A global watchdog says the world economy is picking up speed but faces big political uncertainties and needs to be reformed to make growth work for a broader swath of people.
The Organization for Economic Cooperation and Development says in its latest outlook report, published Wednesday, that world growth should accelerate from 3% in 2016 to 3.6% in 2018, AP reported.
The OECD, whose members comprise the richest economies in the world and that serves as a policy think tank, said businesses and consumers are increasingly confident and employment and trade are recovering.
OECD Chief Economist Catherine Mann said, however, that “policymakers cannot be complacent.” There is uncertainty over government policies in major countries and wages are not yet growing as much as hoped.
“Signs of enhanced momentum in the global economy have recently emerged,” the OECD said. The global economy will grow 3.5% in 2017 before accelerating slightly to 3.6% in 2018. In March, the OECD forecast 3.3% growth this year and 3.6% next year.
A 1.8% increase is expected for the eurozone economy this year and next year, it said.

 Asia Demand Firmer
The OECD is projecting an increase in trade and investment with firmer demand in Asia. For Japan, robust exports to other parts of Asia and the effects of fiscal stimulus at home will lead to stronger growth than previously estimated in 2017 and 2018, the OECD said in its report, Kyodo reported.
While also lifting its outlook on China, the Paris-based organization lowered its projections for the United States, saying the extent of support from fiscal stimulus under the administration of President Donald Trump remains uncertain.
The US economy is projected to grow 2.1% this year and 2.4% next year, down from 2.4% and 2.8% projected in March, respectively.
The Chinese economy is expected to expand 6.6% in 2017 and 6.4% in 2018. Japan’s economy is estimated to expand 1.4% in 2017, up from a 1.2% increase projected in March, and 1% in 2018, up from 0.8%.
Although modest growth is projected, the OECD warned more needs to be done for the world economy to emerge from its “low growth trap.”
“The stronger policy-driven demand growth in China and many other Asian economies that are helping to underpin the modest global upturn projected in 2017 and 2018 cannot be sustained indefinitely,” the OECD said.
The OECD has also predicted South Korea’s gross domestic product will grow from 2.6% to 2.8% in 2018.
The UK economy will slow in the coming years as Brexit uncertainty hampers growth and consumers turn more cautious in the face of higher prices and lower wages, according to the OECD.
The OECD stood by its economic forecasts for UK gross domestic product, predicting it to slow from 1.8% to 1.6% this year. Inflation climbed to 2.7% in April—its highest level for nearly four years.

 Policy Uncertainty
“Policy uncertainty remains high, trust in government has diminished, wage growth is still weak, inequality persists, and imbalances and vulnerabilities remain in financial markets,” it added.
The report came after the export-reliant Japanese economy registered five straight quarters of growth in the January-March period, driven by robust overseas demand and recovering consumption.
The OECD stressed the need for labor reform that will reduce the wage gap between regular and non-regular workers and remove “obstacles” to the employment of women by making childcare more affordable and promoting work-life balance.
“Downside risks to the outlook include heightened geopolitical tensions in Northeast Asia and trade protectionism,” the OECD said.

 From Very Bad to Mediocre
Despite this brighter outlook, growth would nonetheless fall disappointingly short of rates seen before the 2008-2009 financial crisis, OECD Secretary General Angel Gurria said.
“Everything is relative. What I would not like us to do is celebrate the fact that we’re moving from very bad to mediocre,” Gurria told Reuters in an interview.
“It doesn’t mean that we have to get used to it or live with it. We have to continue to strive to do better,” he added.
While recovering trade and investment flows were supporting the improving economic outlook, Gurria said barriers in the form of protectionism and regulations needed to be lifted to ensure stronger growth.
The improvement would also not be enough to satisfy people’s expectations for better standards of living and reduce growing income inequality, he said.
The report was released in time for the 2017 OECD forum on Wednesday in Paris under the theme “Making globalization work: Better lives for all.”
The forum will be followed by the Ministerial Council Meeting, which will be held Thursday and Friday and chaired by Denmark, with Australia and Britain as vice chairs.

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