OECD expects global growth to accelerate in 2014

The Organisation for Economic Cooperation and Development expects global economic growth to accelerate in 2014 with both the US and Japan continuing to outpace the euro area.

“The global economy is moving forward and it is doing so at multiple speeds,”

OECD chief economist Pier Carlo Padoan said today in the Paris-based organisation's bi-annual Economic Outlook.

Differing monetary and fiscal choices across the major developed economies are driving regional divergence with “each path carrying its own mix of risks,” he said.

Global central banks are continuing to try to bolster their economies, with the Federal Reserve buying $85 billion of debt a month and the Bank of Japan unveiling unprecedented stimulus last month.

In the euro region, where the European Central Bank cut its benchmark rate to a record low this month, the OECD said "more can be done through further non-conventional measures."

The OECD sees US gross domestic product rising 1.9 per cent this year and 2.8 per cent in 2014, while Japan’s will increase 1.6 per cent and 1.4 per cent.

The euro area economy will shrink 0.6 per cent this year before expanding 1.1 per cent next, according to the report.

The Paris-based OECD, which advises its 34 member governments on economic policy, sounded a more optimistic note than in recent reports, praising the US for having “repaired” its financial system, welcoming Japan’s shift to a more stimulative monetary policy and noting that public debt levels in many euro-area countries will soon start to decline given the fiscal effort made over “several years.”

Combined growth across OECD countries will accelerate to 2.3 per cent next year from 1.2 percent this year.

China, which isn't a member of the OECD, will expand 8.4 per cent in 2014 after registering a 7.8 per cent GDP gain this year, according to the report.