Look no longer to Wall Street seems to be the message from the OECD today, as it has revised US growth down for this year and next. A resurgent Europe and awakening Asia however mean the global economy may not get sucked down with America, and that a 2000-style stockmarket crash is less likely this time.
The OECD’s look at 30 industrialised nations now says this year’s healthy growth will be trimmed to an average two and a half percent next year, before picking up the year after. The biggest correction is in the USA, where growth is forecast to slow by nearly one percent.
This looks more of a slowdown than start of recession for the moment, but the OECD’s more bullish about the Eurozone, where growth quickened by more than one percent this year. Jean Phillipe Cotis says a “rebalancing of growth among OECD regions” is going on.
City views are for a soft US until springtime when green shoots will appear, another two years of steady or better growth in Europe, and similar improvements in Japan. China continues to drive regional expansion with growth rates of 10 to 11 percent, and India continues to grow strongly, less hard hit by oil price increases than feared.