Thread: OECD Report: Thanks to China, the world economy resumed

The OECD had released its twice yearly economic outlook on Nov. 19. The organization cautiously assessed the economic performance of the world and said that China has helped to pull its member countries out of the recession although it is not an easy task to sustain the growth.

OECD said that “Growth in the O.E.C.D. area has resumed after the most virulent recession in decades”. The driving source of such growth is from non-OECD countries, especially Asian countries, which is highlighted by China’s strong performance. The growth rate of OECD memberes is assumed to “fluctuate around a modest underlying rate for some time to come”.

According to the statistics from the World Bank, the aggregate GDP of OECD member countries took up to 71% of the world total volume in 2007. However, some developing countries which enjoy a much faster economic growth is not included in this organization.

Benefitted from the comparatively loose bank loans and the economic stimulation project of RMB4000 billion, China’s economy is enlarging in much larger steps. The OECD estimated that China’s economic growth rate will be 8.3%, which is a little lower than 8.5%, the estimation of IMF.

The report also stated that the aggregate GDP of OECD members will decrease 3.5% although the economic growth resumed this year. The estimated unemployment rate of 2009 will increase from 8.2% in 2009 to 9% in 2010 and will decrease to 8.8% in 2011.

The current fiscal policies that each countries applied suit the situation and will further stimulate the economy. But governments of member countries should consider ways to end such fiscal stimulation measures and adjust the interest rates back to the normal level.

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