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OECD cuts world economic forecast

Wednesday, May 29, 2013 - 02:16

May 29 - The outlook for global economic growth remains weak, according to the latest OECD report. Kirsty Basset reports that while the United States and Japan shows signs of picking up, the euro zone is still mired in recession.

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The United States is improving, Japan is rebounding, but the euro zone is falling further behind. That's the latest economic assessment from the OECD, which says the world economy should grow by 3.1 percent this year, and 4 percent in 2014. OECD Secretary-General Angel Gurria. (SOUNDBITE) (English) OECD SECRETARY GENERAL ANGEL GURRIA SAYING: "Today we're still confronted with an outlook that remains weak and a recovery that continues to be hesitant and uneven across countries and regions." The OECD's latest world economic outlook is slightly more pessimistic than its November forecast of 3.4 percent growth in 2013 and 4.2 percent next year. The euro zone is expected to remain in recession for a second year, with predictions the economy will contract 0.6 percent this year. (SOUNDBITE) (English) OECD SECRETARY GENERAL ANGEL GURRIA SAYING: "There is a generalised opinion that the so-called "tail risks", which means big, unexpected accidents have perhaps receded, but that the situation remains particularly fragile in Europe." Only Germany seems to be the exception. The downbeat figures came as the European Commission gave its annual economic recommendations in Brussels, urging a slower pace of tightening across the euro zone. France, Spain, Poland and Slovenia were given two extra years to cut their budget deficitis, while Portugal and the Netherlands were given an extra year. Commission President Jose Manuel Barroso. (SOUNDBITE)(ENGLISH) EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BAROSSO SAYING: "This extra time should be used wisely to address France's failing competitiveness as French companies' market shares have experienced worrying erosion in the last decade." Reuters BreakingViews Economics Editor Edward Hadas says the fiscal loosening is an inevitable surrender to reality. (SOUNDBITE)(ENGLISH) REUTERS BREAKINGVIEWS ECONOMICS EDITOR EDWARD HADAS SAYING: "Markets are docile, yields are coming down, and voters are restive. They're not really very happy with the situation. It would be crazy, it would be suicidal to insist now, so they're being realistic in terms of accepting what's going on." The EC's recommendations will become binding once they've been approved by EU leaders at a a summit in late June.

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OECD cuts world economic forecast

Wednesday, May 29, 2013 - 02:16