Investing.com - The Organization for Economic Co-operation and Development revised down its forecasts for global economic growth in 2013 and 2014 “significantly” on Tuesday, warning that the outlook for emerging markets is deteriorating.
In its twice-yearly economic outlook report, the leading economic agency said that growth would slow in many emerging markets and warned that the possibility that the Federal Reserve will soon start to scale back its asset purchase program posed a threat to financial stability.
The global economy is now forecast to grow by 2.7% this year and 3.6% in 2014, down from forecasts of 3.1% and 4% made in the May report.
“The global economy continues to expand at a moderate pace, with some acceleration of growth anticipated in 2014 and 2015. But global growth forecasts have been revised down significantly for this year and 2014, in large part due to weaker prospects in many emerging market economies”, the OECD said.
OECD trimmed its forecast for euro zone growth to 1% in 2014, from the May estimate of 1.1%. However, it upgraded its forecast for the currency bloc for 2013 from a contraction of 0.6% to a contraction of 0.4%.
It said "weakness" in the euro zone banking system was a "major drag" on growth and warned that there is an increasing risk of deflation in the currency bloc.
The OECD revised its forecasts for the U.K. up sharply, saying the economy will grow by 2.4% in 2014, up from 1.5% in May.
The US economy would grow 2.9% in 2014 it said, but warned that the “potentially catastrophic crisis" over the debt ceiling had undermined investor confidence.
The OECD left the outlook for the combined economies of its 34 members unchanged at 1.2% growth this year and 2.3% in 2014.
In its twice-yearly economic outlook report, the leading economic agency said that growth would slow in many emerging markets and warned that the possibility that the Federal Reserve will soon start to scale back its asset purchase program posed a threat to financial stability.
The global economy is now forecast to grow by 2.7% this year and 3.6% in 2014, down from forecasts of 3.1% and 4% made in the May report.
“The global economy continues to expand at a moderate pace, with some acceleration of growth anticipated in 2014 and 2015. But global growth forecasts have been revised down significantly for this year and 2014, in large part due to weaker prospects in many emerging market economies”, the OECD said.
OECD trimmed its forecast for euro zone growth to 1% in 2014, from the May estimate of 1.1%. However, it upgraded its forecast for the currency bloc for 2013 from a contraction of 0.6% to a contraction of 0.4%.
It said "weakness" in the euro zone banking system was a "major drag" on growth and warned that there is an increasing risk of deflation in the currency bloc.
The OECD revised its forecasts for the U.K. up sharply, saying the economy will grow by 2.4% in 2014, up from 1.5% in May.
The US economy would grow 2.9% in 2014 it said, but warned that the “potentially catastrophic crisis" over the debt ceiling had undermined investor confidence.
The OECD left the outlook for the combined economies of its 34 members unchanged at 1.2% growth this year and 2.3% in 2014.