OECD chief sees no global double-dip
The world economy is slowing down due to a combination of factors such as the eurozone’s debt problems and a weak US housing sector, but it is not headed for a double-dip slump, the head of the OECD has said.
“We do not believe there is a return to a recession,” Angel Gurria, secretary-general of the Organisation for Economic Co-operation and Development, told reporters when asked if recent signs of a slowdown pointed to a major weakening in the global economy.
He cited political turmoil in the Middle East, debt problems in eurozone economies, higher commodities prices, the devastating March earthquake in Japan and fractious US budget negotiations as some of the factors behind the cooldown.
“There is recovery. There are positive numbers, (although) it is going to be a little softer than we thought initially,” he said at a news conference in Seoul on the sidelines of a business conference co-hosted by the OECD.
The remarks came as recent data around the world raised concerns that economic momentum was slowing in many advanced countries and in particular the US, on which many export-reliant Asian economies rely heavily for growth.
Gurria also said current talks among eurozone leaders on helping Greece avoid a debt default required a technical approach to make sure legal aspects were well covered, as well as strong participation from the private sector.
“It has already taken too long. The solutions are on the table. I think the stakes are very high,” he said.
Gurria also said he expected commodity prices to go up in real terms over the next decade, given supply and demand.
“But it is also desirable because better prices make farmers invest more, plant more and produce more, and we need to increase productivity in the agricultural sector,” he said later at a meeting with a small group of reporters.
“The trend is up for the next ten years, which will reverse the trends we have seen so far,” he said.