The global economy is moving forward, but divergence between countries and regions reflects the uneven progress made toward recovery from the economic crisis, according to the OECD's latest Economic Outlook. The OECD indicated that historically high unemployment remains the most serious challenge facing governments.
According to the latest Economic Outlook report from the OECD, world real gross domestic product (GDP) is projected to increase by 3.1 percent this year and by four percent in 2014. Across OECD countries, GDP is projected to rise by 1.2 percent this year and by 2.3 percent in 2014, while growth in non-OECD countries will rise by 5.5 percent this year and 6.2 percent in 2014. Economic activity is projected to rise by 1.9 percent in the US this year and by a further 2.8 percent in 2014. GDP in the euro area is expected to decline by 0.6 percent this year and then rebound by 1.1 percent in 2014, while in Japan GDP is expected to grow by 1.6 percent in 2013 and by 1.4 percent in 2014.
"The global economy is strengthening gradually, but the upturn remains weak and uneven," said OECD secretary-general Angel Gurría. "Supportive monetary policies, improving financial market conditions and a gradual restoration of confidence are at the root of the recovery. Also, the fiscal adjustment of the last few years is beginning to pay off. Several countries are close to stabilising their government debt-to-GDP ratios and ensuring a gradual decline in indebtedness over the longer term," Mr. Gurría said.
In addition, the OECD warned governments that urgent action must be taken to reduce unemployment, which has risen to dangerous levels in many countries. Jobs are being created in some parts of the OECD, but more must be done. While labour markets are set to firm gradually in the US and Japan over the coming two years, unemployment is likely to continue to rise further in the euro area, stabilising above 12 percent only in 2014, the OECD stated.