The OECD has reduced its forecast for global growth for 2015 and 2016.
It now estimates expansion will be 3% this year, followed by 3.8% growth in 2016. Earlier it had predicted growth of 4% and 4.3% respectively.
The world economy is expected to "strengthen gradually to approach its (pre-crisis) average pace by late 2016" while remaining “modest” compared to pre-crisis growth. It also noted that the recovery “has been unusually weak”.
However, it expected growth "to be shared more evenly across regions of the world" in the coming period.
Growth in the eurozone was forecast at 1.4% this year, followed by 2% next year.
Lower oil prices, the weak euro, better financial conditions and fresh stimulus spending are expected to bolster the recovery. Unemployment, however, will remain high and above 10% during 2015.
The OECD said a Greek exit from the eurozone could unset the area’s limited recovery.
"Failure to reach a satisfactory agreement between Greece and its official creditors would intensify perceptions of redenomination risks and uncertainty.
“Although the implications of such an extraordinary event are impossible to predict, they would most likely involve an aggravation again of financial fragmentation in the euro area, dampening real activity and restarting negative feedback loops between the real economy, the banking sector and the public finances in vulnerable euro area countries," it said.
Comments
The Troika repeatedly moaned that Portugal's statistics either didn't exist, were out of date or didn't measure what they should do. So, as you can read in the IMF reports, they used estimates or comparisons.
Reading in todays Guardian of the Troika take it or leave it 'Ultimatum' (now where have I heard that word before?) to the Greeks there is an entire paragraph on the requirement to establish an independent statistics office. To be run by a credible president and team - all recruited openly and transparently. In the detail is even the requirement to redeploy the dead beats who have so failed Greek statistics gathering and the Troika so far.
What is worrying is how can the EU progress if these countries are not even gathering the data needed to measure progress?
http://www.theguardian.com/business/live/2015/jun/04/greek-bailout-talks-tsipras-creditors-offer-live-updates
At first sight this appears harsh.
But then we recall the Greek Island of the Blind Zakynthos and its implausibly high incidence of blindness.
As with Portugal's benefit claimants - how many are genuinely needy and deserving targeted help and how many are 'swinging the lead' ? Not ill, disadvantaged or even unemployed. Is Portugal's SS mature enough to differentiate ?
http://www.wsj.com/articles/SB10001424052970203370604577263863362854348
The Troika surely must have spotted so many of Portugal's red lines over the years but have they been killed for good yet ? How many, quiet during the crisis, have just been lying in wait for new inward investment financing?
Always remember that B& B's (alojamento locals) - the simplest level of tourism, is still such an intentionally obstructed and unreasonably expensive licensing procedure for foreigners and outsiders that no end is in sight.
The point few in Portugal realise is that so many of todays requirements by the Troika to Greece are, as with Portugal, administrative arrangements, procedures to overcome obstructions and police costs, that should have been established over 20 years ago !
But even now do not exist in reality. The aim to dither at enormous cost until the foreigner goes home is paramount. Even if it costs future tax revenue.
Keep the colour bar UP !