OECD raises member countries' economic growth forecasts

OECD raises member countries’ economic growth forecasts

The Organization for Economic Cooperation and Development (OECD) raised its forecasts for the world largest economies' growth. The Group 6, formed by the US, Germany, France, Italy, Japan and Great Britain, is expected to have an estimated growth of 3.5%, according to the OECD statement released Tuesday. Despite the generally optimistic outlook, US economic growth forecast was reduced to 4.3% from 4.7% for 2004. OECD attributed the slowing momentum in the world's largest economy to rising interest rates and fading effects of tax cuts. However, OECD's forecast for the economic growth of Euro zone and Japan was raised respectively from 1.6% to 2% and from 3% to 4.4%. OECD Chief Economist Cotis pointed out that Japan's economic growth forecast was raised due to strong corporate profits and a steady recovery in business investment. In the Euro zone as well, business activities maintain its strong status. For Germany and France, OECD increased its growth forecast to 1.7% from 1.1% and to 2.7% from 2% respectively. The economic growth in Italy and Great Britain is expected to be 1.3% and 3.4% respectively. OECD also stated that the rise in oil prices, the slow job growth and a prolonged period of low US interest rates impacted the Euro zone.