March 29, 2024

O.E.C.D. Says Growth in Developed Countries to Accelerate

PARIS — Economic growth among developed nations is likely to accelerate in the first half of this year as strength in the United States and Japan help to compensate for the continuing malaise in Europe, the Organization for Economic Cooperation and Development said Thursday.

“The global economy weakened in late 2012 but the outlook is now improving for O.E.C.D. economies,” the organization’s chief economist, Pier Carlo Padoan, said in the report.

The Group of 7 industrialized nations alone will grow at an annualized 2.4 percent in the first quarter and 1.8 percent in the second, the report estimated. G-7 nations shrank by 0.5 percent overall in the fourth quarter of 2012.

Mr. Padoan said “bold policy action,” particularly from the monetary authorities, was still needed to ensure growth, particularly in Europe.

The O.E.C.D., which is based in Paris, forecast that the U.S. economy would rebound in the first quarter to grow 3.5 percent on an annualized basis from the last three months of 2012, when growth was just 0.1 percent. The U.S. economy also appears to be on track for second-quarter growth of around 2.0 percent, the report said.

Japan, which under its new prime minister, Shinzo Abe, has committed to attacking deflation with all the resources at its disposal, will rebound to 3.2 percent growth in the first quarter of 2013 and 2.2 percent in the second quarter, the organization said. Japan’s economy grew just 0.2 percent in the October-December period.

But for Europe, hobbled by the seemingly endless euro crisis and budget-balancing measures, as well as joblessness and weak demand, “a meaningful recovery is likely to take somewhat longer,” the organization said. It predicted there would be a decided divergence between the economy of Germany, which is forecast to rebound strongly in the first half, and the rest of the region, which “will remain slow or negative.”

It predicted that Germany would post first-quarter growth of 2.3 percent, accelerating to 2.6 percent growth in the second quarter. The German economy shrank 2.3 percent in the last three months of 2012.

France, the second-largest euro zone member after Germany, will probably remain moribund, the report said, shrinking by about 0.6 percent in the first quarter before eking out 0.5 percent growth in the April-June period. The French economy shrank 1.2 percent in the fourth quarter.

Britain will manage first-quarter growth of 0.5 percent and 1.4 percent in the second quarter, after slipping 1.2 percent in the fourth quarter of last year, the report said.

The organization said growth from developing nations would continue to outpace the advanced economies, with China alone expected to simmer along at a level “well above 8 percent” in the first six months of the year.

Noting the still-fragile state of confidence and widespread unemployment, “bold policy action to support activity remains necessary in all major O.E.C.D. economies,” Mr. Padoan said. Given tight government finances, monetary policy remains a key instrument for supporting demand,” adding, “even though monetary stimulus may not always be sufficient and carries its own risks.”

Jacques Cailloux, chief European economist at Nomura in London, said that the O.E.C.D.’s overall forecasts appeared to be “considerably” more optimistic than most private forecasters were expecting.

“For the U.S., Japan and Germany the first half looks to be very strong,” he said.

Mr. Cailloux also said he expected the 17-nation euro zone economy to decline about 0.8 percent in 2013 from a year earlier, and that – so far, anyway – the boiling crisis in Cyprus had not led him to downgrade that already dismal view.

“Our forecast assumed some pretty large shocks and uncertainty,” he said. “Obviously Cyprus is a shock, it’s greater than we expected, but so far it hasn’t affected our broader outlook.”

Article source: http://www.nytimes.com/2013/03/29/business/global/oecd-says-growth-in-developed-countries-to-accelerate.html?partner=rss&emc=rss

Chinese Exports Grew in December

HONG KONG — Exports from China grew at their fastest clip in more than half a year in December, underpinning hopes that global trade may be stabilizing, and offering some good news for the Chinese economy as it struggles to regain momentum.

Trade data can be volatile and subject to seasonal factors that skew numbers from one month to the next, analysts cautioned, but last month’s 14.1 percent jump in exports from a year earlier topped expectations by a very wide margin, and was a clear positive for the Chinese economy, the world’s second-largest after the United States.

“The numbers were a very pleasant surprise,” Yao Wei, a China economist at Société Générale in Hong Kong, said after the data were released on Thursday. She added that the export performance over the past three months as a whole, while not excellent, showed that external demand was “on an upward trend.”

December’s jump in exports was the fastest expansion since May last year. Exports had edged up just 2.9 percent in November, and climbed 11.6 percent in October, according to official data.

“Put in perspective with the four previous export downturns, 2012 looks to have done quite well,” Xianfang Ren and Alistair Thornton, economists at IHS Global Insight in Beijing, wrote in a research note, referring to the country’s export performance.

Taken together with recent trade data from Taiwan and South Korea, Ms. Yao said, the December data from China showed that demand from the United States was fairly stable. Demand from beleaguered Europe, she said, was “not great, but not bad,” while demand from emerging markets — which have generally enjoyed far faster growth than developed nations in recent years — remained firm.

At the same time, however, the economic and budget travails of the United States and Europe continue to overshadow the global outlook, and are likely to curtail future growth, economists have long cautioned.

“With our projection for continued contraction in the euro zone and continued slowdown in the US economy,” the economists at IHS commented Thursday, “we believe China’s export sector will face another uphill battle this year — an even tougher one than 2012.”

Article source: http://www.nytimes.com/2013/01/11/business/global/chinese-exports-grew-in-december.html?partner=rss&emc=rss