Global Economic Growth Slowed in First Quarter Says OECD

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The FINANCIAL — The global economy slowed for the second straight quarter in the first three months of the year, the Organization for Economic Cooperation and Development said, as the recovery from the financial crisis remained weak and fitful, according to Nasdaq.

The Paris-based research body said on June 11 that the combined gross domestic products of the Group of 20 largest economies was 0.7% higher in the first three months of 2015 than it was in the final three of 2014. That marked a slowdown from a 0.8% rate of growth in the fourth quarter of last year, and 0.9% in the third. G-20 members account for 85% of total global economic output.

It was the lowest rate of growth since the first quarter of last year, and as then was led by a contraction in the U.S. However, the U.S. was not alone in experiencing an early-year contraction, with economic output also falling in Brazil and Canada.

A number of other major economies experienced slowdowns, including China, Germany, the U.K., Mexico and South Africa.

By contrast, Italy and France emerged from stagnation, while Japan also picked up, as did India and Turkey.

Economists believe the U.S. economy will rebound from its first-quarter setback. But a second straight quarter of slowing growth underlines the difficulties the world’s top policy makers face in exiting crisis-management mode and lifting growth out of a long-term funk, seven years after the financial crisis struck.

New Zealand’s central bank lowered its benchmark interest rate for the first time in four years Thursday, while South Korea’s central bank cut its benchmark interest rate to a record low. Those moves followed the provision of additional stimulus by the bank of Japan, the European Central Bank, the Reserve Bank of India, the People’s Bank of China and a host of other, smaller central banks.

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By contrast, the U.S. Federal Reserve has signaled its desire to raise its benchmark interest rate later this year.

The World Bank on June 10 downgraded its outlook for this year, saying it now expects the world economy to grow by 2.8% , 0.2 percentage point slower than it estimated in January. Last week, the OECD itself cut its global growth forecast.

“Global growth has yet again disappointed,” said World Bank Chief Economist Kaushik Basu.

 

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