The Assessment, presented in Paris by Chief Economist Pier Carlo Padoan, says that the G7 economies are expected to grow at an annualised 2.4 per cent rate in the first quarter of 2013 and at a 1.8 per cent rate in the second. It notes that financial markets are outpacing real activity, which has been held back by weak business and consumer confidence, and highlights the risk that asset prices may rise beyond levels justified by fundamentals.
“The global economy weakened in late 2012 but the outlook is now improving for OECD economies”, Mr Padoan said. “Bold policy action remains necessary to ensure a more sustainable recovery, particularly in the euro area, where growth is uneven and remains slower than in other regions."
The OECD projects that the euro area’s three largest economies – Germany, France and Italy – will grow by 0.4 per cent during the first quarter and by an additional 1 per cent in the second, but points to a renewed divergence between growth in Germany and the euro area economies.
Weak growth and low confidence are expected to complicate efforts to bring down high unemployment rates across much of Europe. Monetary stimulus remains necessary but needs vary across countries.
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© OECD
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