The Organisation for Economic Cooperation and Development does not anticipate a recession in the United States. And the OECD expects the European Central Bank to raise the cost of borrowing to 4% in the second quarter and 4.25% around the end of the year.
Its forecast for growth this year is 2.4% for the US, 2.2% for the euro zone and 2% for Japan. It estimates the euro zone grew by 2.8%last year. OECD chief economist Jean-Philippe Cotis said Japan needs to keep interest rates low until inflation is “firmly positive” again there.
On the recent stock markets declines, Cotis did not feel they represent a major correction. He said: “After a long period of appreciation in asset prices, you finish up with corrections which are more or less strong. The one we’ve just seen was not major.’ He had no opinion on whether shares are overvalued and noted the ratio between share prices and earnings in the US is still in line with their long-term averages.