Global economic growth will decline sharply in 2013
Global economic growth will decline sharply in 2013 and the sovereign debt crisis in the Eurozone remains the biggest threat to the world economy. This is the main content of the latest "Economic Outlook" report of the Organization for Economic Cooperation and Development (OECD) released on November 27.
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In a report prepared before the eurozone and the International Monetary Fund (IMF) reached an agreement to disburse the next tranche of 43.7 billion euros of the 130 billion euro bailout package agreed by international creditors for Greece, the OECD cut its global economic growth outlook for next year to 1.4 percent, from 2.2 percent previously. The OECD said the US, the world's largest economy, would grow 2.2 percent this year and 2.0 percent in 2013, down from its May forecast of 2.4 percent and 2.6 percent, respectively. For Japan, its gross domestic product (GDP) would grow just 1.6 percent this year and 0.7 percent next year, down from its previous forecast of 2.0 percent and 1.5 percent. Meanwhile, the eurozone economy would shrink 0.4 percent and 0.1 percent over the two years. The previous forecast had the eurozone economy shrinking by 0.1% this year, before growing by 0.9% next year. The unemployment rate in the region is also expected to rise from the previous forecast, to 11.1% this year and 11.9% next year. The OECD also forecasts economic growth in Brazil from 2012 to 2014 at 1.5%, 4.0% and 4.1%, China at 7.5%, 8.5% and 8.9%, and India at 4.4%, 6.5% and 7.1%.
In addition, the budget stalemate in the United States, where tax increases and harsh spending cuts will take effect in January 2013 if Republicans and Democrats cannot reach a compromise, is also a potential threat to global economic activity, according to the OECD. Therefore, the fate of the world economy next year depends largely on the ability of political leaders in Europe and the United States to deal with the problem of public debt and sluggish business activity.
According to (Hanoimoi) - HV
