“The longer the global economy is in a trap of low growth, the harder it will be to the authorities of the countries to fulfill their fundamental promise,” declared the chief economist of the OECD Catherine Mans published in the 1 June report of the state of the economy of the world in 2016. The man added that if the authorities do not take measures to increase productivity, negative damage will feel “both the old and the young generation”.
According to the Secretary-General of the OECD Jose angel Gurria, the economy of developed countries does not show significant growth, and in some developing countries, which have been the world locomotives from the time of the global financial crisis of 2008, on the contrary, slows down. Gurria stressed that serious challenges represent a low level of productivity growth and rising inequality.
According to OECD forecasts, in 2016 the growth rate of the world economy does not increase — it, as in 2016 will be 3%. Not much will accelerate it and in 2017 (up 3.3%, according to calculations of the organization). The main factors of low growth of the world economy, according to the report, are weak world trade growth, weak investment activity, the reduction of wages and low activity in key emerging economies.
The OECD significantly downgraded its forecast for the Russian economy: in 2016 the Russian economy will shrink by 1.7% and return to growth in 2017 (0,5%). In the previous OECD forecast for the Russian economy in November 2015, the organization predicted the decline of Russia’s GDP in 2016 is only 0.4% growth in 2017 is 1.7%. Thus, according to forecasts of the Russian Ministry of economic development, in 2016 the outcome of Russia’s economic decline by 0.2%.
According to the organization, Russia needs to make a priority social expenditures, as well as to protect the incomes of the most vulnerable segments of the population. Fiscal system of Russia should be aligned with consistently low oil prices. The OECD estimates that this could contribute to a return to the budget rule, which would limit the use of revenues from the sale of oil. In its forecast for Russia, the OECD believes that the ruble will remain stable, the sanctions against Russia will remain in force, and the oil did not significantly increase in price. Much to the Russian economy will depend on geopolitical factors.
The Outlook for the us economy, the OECD has also deteriorated: in 2017, the U.S. GDP will grow 2.2%, not 3.3%, as predicted in February. By the end of 2016 the us economy will grow by 1.8% (previously forecasted 2% growth). The growth of the Chinese economy in 2016-2017 to slow further to 6.5% in 2016, 6.2 per cent in 2017).
According to OECD, in countries belonging to the organization, in 2016 GDP growth per capita will be about 1%, which is 1.75% less than that which was in member countries of the organization for 20 years prior to the global financial crisis. “If policymakers do nothing, the slowdown will worsen and will have long-lasting negative consequences for employment as well as income levels and inequality,” reads the report.
To exit from the current situation, the report suggests that the country authorities to increase investment, promote competition and mobility in the labour market.