In keeping with similar U.S. findings by the Federal Reserve yesterday, international economic-studies group the Organization for Economic Cooperation and Development says that the worldwide recovery is slowing down. If the slowdown in growth persists and points to another economic contraction, the OECD says, governments need to ramp up monetary stimulus in the form of quantitative easing and prolonged low interest rates. Countries that still have some money to spend on stoking growth “could also delay plans for fiscal consolidation.” In other words, it’s not time yet to shore up national debts.
OECD chief economist Pier Carlo Padoan says that consumers are still woried about high unemployment and a stagnant housing market. On the other hand, investment has hit a floor, and corporate profits are strong. As for financial markets, they’re recovering but still kind of screwy. The uncertainty created by the mixed data is keeping the global economy from warming up.
Here’s a video of Padoan explaining the situation with a charming accent.