The OECD released it’s latest economic outlook overnight which highlighted that while the global economy is strengthening, “significant risks remain.”
But in almost hyperbolic language, OECD secretary general Angel Gurria said: “Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again.”
For Australia specifically the OECD didn’t mince words when advising Treasurer Hockey to go easy in next week’s budget.
The OECD noted:
Given near-term uncertainties in the re-balancing of the economy away from investment in the natural resource sector, heavy front loading of fiscal consolidation should be avoided.
Equally though, it is easy to see why the OECD believe rates in Australia should start to rise again in 2015, given the state of Australia’s economic performance relative to the OECD as a whole.
They say growth will be 2.5% in 2014 and almost 3% in 2015, which is roughly in line with what most pundits expect for Australia.
But the OECD is upbeat enough on growth to note that “monetary stimulus should start to be withdrawn in the first half of 2015.”
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