The OECD has just published its latest Economic Outlook. According to the report, the world economy has strengthened, with monetary and fiscal stimulus underpinning a broad-based and synchronised improvement in growth rates across most countries.
Annual growth of the world economy is projected to improve slightly in 2018, but remains below the pre-crisis period and that of past recoveries. Longer-term challenges inhibit stronger, more inclusive, and more resilient economies.
The Outlook notes persistent effects of prolonged sub-par growth on private sector performance including investment, trade and productivity. Employment rates are now above pre-crisis rates in many OECD economies and unemployment is falling, but this has yet to produce solid real wage gains. In the absence of a clear sign of change in underlying trends, growth across the OECD is projected to weaken in 2019.
Household and corporate debt in many advanced and emerging market economies is high, creating vulnerabilities and raising questions about the sutainability of growth in the medium term. A special chapter in the Economic Outlook, on “Resilience in a Time of High Debt,” calls for an integrated policy approach, drawing not only on macroeconomic and macroprudential instruments but also tackling underlying structural issues.
The full text is available for the IESE Community here.