The OECD is concerned about the drop in the euro area, on the edge of … – Les Echos

The OECD is concerned about the drop in the euro area, on the edge of … – Les Echos

The growth prospects of the journals baisse.L’OCDE Eurozone calls on European states to respond and the ECB to do more

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The OECD experts do not go punches. In their interim forecast, released yesterday, they come down to 0.4 growth prospects in 2014, to 0.8% for the euro area, compared to May. For 2015, they have shown little more optimistic now expecting a rise of only 1.1% of GDP instead of 1.7% expected previously. This growth remains anemic “The most worrying aspect” of the report. The Eurozone needs “of a stronger monetary support” to avoid slipping into deflation, the OECD recommends.

“Recent measures taken by the ECB are welcome, but quantitative easing is necessary , “said the organization. “Quantitative easing” means that the ECB has cut rates and announce large buybacks private debt would go further and also redeem public debt, ignoring the German resistance. “ must end this perception, which is that monetary policy in the eurozone, it’s always too late and too little ,” Rintaro Tamaki found, chief economist of the OECD. Furthermore, the OECD estimates that “ given the weak demand, European countries should make maximum use of the flexibility of fiscal rules .”

For France, the OECD forecasts are reduced to 0.4% this year, followed by 1% next year. A far cry from 0.9% and 1.5% still planned for May But the government had anticipated this deterioration and new OECD forecasts are exactly with that in the 2015 budget If Italy is the most affected (see below), Germany suffers, too, a correction lower (1.5% in 2014 and 2015).

“Solid” American Recovery

The UK, however, confirms his good. The OECD is happy to see a very slight decrease (- 0.1%) growth forecast (to 3.1% in 2014 and 2.8% in 2015). Same thing for the United States: the recovery is “solid” , says the OECD (2.1% in 2014 and 3.1% next year). For Japan, growth is expected at 0.9% this year and 1.1% in 2015.

Entered into recession in the first half, Brazil will meanwhile finish a slight increase (+0.3%) this year. It is far from the 1.8% announced in May. And next year, he will have to settle for a 1.4%, a reduction of 0.8% forecast in the space of a few months. For Brazil only accentuates the contrast between emerging markets. China, despite its slowdown, should see its GDP grow by 7.4% this year and 7.3% next year (forecast unchanged) while India raises its head (+ 5.7%, a upward revision of 0.8%) before reaching 5.9% next year.

This uneven global recovery presents several risks. The already visible, to accentuate the geopolitical tensions. At the same time, conflicts such as those in the Middle East or Ukraine impacting more and more savings. Another risk is the euphoria – unjustified -. Financial markets, including the correction could be “brutal”