MNI: OECD Sees Global Growth Firming, Helped by Healthier EZ

--Forecasts for Japan, China, Russia, Canada Also Raised

By Jack Duffy

     PARIS (MNI) - Global growth is firming, led in part by a healthier

Eurozone, the Organization for Economic Cooperation and Development said

Wednesday.

     In its interim economic outlook report, the Paris-based OECD said the

global economy would grow by  3.5% this year, unchanged from its forecast in

June, but would accelerate to 3.7% in 2018, an upward revision from the 3.6% it

forecast in June.  

     "The upturn has become more synchronised across countries," the OECD said.

"Investment, employment and trade are expanding." 

     The Eurozone, for years the laggard of the global economy, came in for some

of the biggest upward revisions. Growth in the currency bloc will reach 2.1%

this year, a 0.3pp  boost from June, and 1.9% in 2018, up 0.1pp from the June

estimate.

     The Eurozone is benefitting from "rising employment rates, accommodative

monetary policy and reduced political uncertainty," the OECD said. Risks from a

rising euro were "modest" and outweighed by strong business confidence in

Germany and rising employment in France and Italy, it added. 

     Growth estimates for Germany, France and Italy were revised upward for both

this year and next, with the German economy now expected to expand by a robust

2.2% this year and 2.1% in 2018.

     Elsewhere in the world, the OECD said Japan, Canada, China and Russia had

all been positive surprises with growth coming in stronger than expected.

     OECD forecasts for the US and the UK were left unchanged. The US is still

seen growing by 2.1% this year and 2.4% next year, while the UK economy is

expected to slow from 1.6% this year to 1.0% in 2018 as "uncertainty remains

over the outcome of negotiations around Brexit."  

     Overall stronger global growth reflects a rebound in industrial production,

consumer spending and investment, and a recovery in world trade from the slump

in late 2015 and early 2016, the OECD said. 

     The organization warned against complacency, however, saying wage growth

remained disappointing and that inflation was still weak. Some economies still

needed continued support from monetary policy while structural reforms were

needed globally to boost productivity, the OECD said. 

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

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