OECD: Weak eurozone holding back global recovery

Weak recovery in countries using the euro is holding back global recovery, according to the Organisation for Economic Co-operation and Development.

The BBC reports the OECD has downgraded its forecast for most large economies adding conflicts in the Ukraine and Middle East and the Scottish independence vote are areas of risk and uncertainty.

Its 2014 estimate for eurozone economy growth is now 0.8 per cent, down from a 1.2 per cent estimate in March.

Its growth forecast for the UK was cut by 0.1 percentage points to 3.1 per cent. The US outlook was dropped to 2.1 per cent from 2.6 per cent whilst Japan’s was cut to 0.9 per cent from 1.2 per cent.

Although not an OECD member, China’s forecast was unchanged at 7.4 per cent as it “has so far managed to achieve an orderly growth slowdown to more sustainable rates”.

India was the single economy predicted likely to grow quicker, with its forecast upgraded to 5.7 per cent from 4.9 per cent. India has voted in a new government which the OECD says will pursue growth-oriented reforms and progress in containing inflation.

The OECD did not provide an update to its forecast for global growth for 2014, which stood at 3.4 per cent in May.