GLOBAL growth is expected to move closed towards its pre-crisis trend rate by the end of next year, but increased capital spending is needed to push economies forward.
According to the latest outlook from the Organisation of Economic Co-operation and Development (OECD), activity is becoming more evenly shared across major economies and overall external imbalances are less marked than in the run-up to 2007.
The group sees global growth at 3.1 per cent in 2015, rising to 3.8 per cent in 2016. The upturn in global growth is expected thanks to low oil prices, widespread monetary easing and a reduction in the drag from fiscal consolidation in the major economies.
However, the OECD warned that the global economy “can be characterised as only achieving a muddling-through “B-minus ” grade”, with growth in the first quarter of this year being weaker than in any quarter since the crisis.
It added that weak investment in many economies is hindering an increase in consumption, job creation and wage rises, while also eroding the prospects for long-term sustainable growth.
“The global economy is projected to strengthen, but the pace of recovery remains weak and investment has yet to take off,” OECD secretary-general Angel Gurria said.