On November 9, the OECD issued its twice-yearly Economic Outlook statbook, updated for projections into Q3 for most national economic accounts. Despite past enthusiasm for global prospects in 2015, the narrative has not-so-subtly shifted, a major transformation coming from an orthodox bastion like the OECD.
Global growth prospects have clouded this year. Global growth has eased to around 3%, well below its long-run average. This largely reflects further weakness in emerging market economies (EMEs). Deep recessions have emerged in Brazil and Russia, whilst the ongoing slowdown in China and the associated weakness of commodity prices has hit activity in key trading partners and commodity exporting economies, and increased financial market uncertainty.
Global trade growth has slowed markedly, especially in the EMEs, and financial conditions have become less supportive in most economies.
It is difficult to simply accept these limitations lacking comprehensive causative processes put forth, but the fact that they are at least being recognized represents a (small) step forward. These are portrayed as if they are “things” of themselves; commodity price collapse, “financial market uncertainty”, global trade growth collapse, etc. Despite the unexamined “mystery” of all those, or maybe because of that intentional obtuseness, the OECD still expects global growth to accelerate in 2016 and really 2017. That is, of course, the same pattern that plays out year after year after year, only 2015 has already held more than the typical amount of setbacks and “unconnected” financial mysteriousness.
To this point, the organization is unwilling to see anything more than a visible economic problem for EM’s alone. Brazil and Russia have their recessions, and China its unexplained slowdown, but the rest of the “developed” world is expected to remain rather steady in growth (well,except Canada perhaps?) no matter all the global turmoil. It is the stated “risks”, however, that suggest much about the inner turmoil at these economic outposts:
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