Slowdown in emerging economies will result in sluggish global growth: OECD

An economic assessment report has revealed the global growth will remain lower due to a slowdown in emerging nations.

 

The Organization for Economic Cooperation and Development (OECD) said that developed countries are staging a comeback after years of slow growth, but developing economies will continue to face a slump this year.

 

The OECD said it was necessary to support demand in order to minimize the risk of the economic recovery being derailed as several risks exists, the Japan Times reports.

 

Deputy Chief Economist Joergen Elmeskov said that gross domestic product of the G7 economies has been improving since shrinking in the last quarter of 2012 and will grow at an annual rate of about 2.5 % in the second half of this year.

 

US growth has been calculated at 2.7 %, while Japan's economy has been forecasted at 2.4 % and Chinese economy will be at 8.1 % for October-December.

 

The OECD said that capital outflows and economic growth deceleration were happening in emerging economies due to a speculated reduction in the US Federal Reserve's asset purchases.