The global economy is anticipated to grow more quickly than previously expected, according to the latest OECD economic outlook Wednesday. According to the Paris-based economic thinktank, that uptick is largely due to better prospects across Europe, Japan and Canada.
The OECD now expects global economic growth of 3.5% in 2017, rising to 3.7% in 2018. The 2017 forecast is unchanged from its June calculation, while the 2018 rate has been revised upwards from 3.6% earlier this year.
In addition to that, the OECD expects the euro area economy to grow at a faster pace during 2017 than previously. After forecasting GDP growth of 1.8% for 2017 and 2018, the organisation is now much more upbeat and expects the economy to expand 2.1% this year and 1.9% in 2018.
The UK economy remains a laggard, however. While the OECD didn’t revise its forecast for the UK – which is for 1.6% growth in 2017, falling to just 1% in 2018 – it continues to expect the UK will exit the EU without a free trade deal.
While presenting these latest forecasts, OECD chief economist Catherine L. Mann said the world economy is in a positive place right now. However, she warned more work was needed to maintain economic momentum over the longer-term.
“The short-term outlook is more broad-based and the upturn is promising, but there is no room for complacency,” said OECD Chief Economist Catherine L. Mann.
“Monetary policy should remain accommodative in some economies but with an eye on financial stability so as to remain supportive of further rebalancing towards fiscal and structural initiatives. Structural efforts need to be intensified to bolster the nascent investment recovery, to address slow productivity growth and to ensure the recovery yields benefits for all,” Mann added in her address.
In addition, the OECD growth forecast report also stated that while unemployment rates were positive, earnings growth everywhere wasn’t. Meanwhile, the think tank also added that more work is still required to support emerging economies to help create a more sustainable period of global economic expansion.