November 20, 2017 - Economic growth in developed countries slowed in the three months to September, but remains on course for a pickup in 2017 overall.
The Organization for Economic Cooperation and Development said Monday the combined economic output of its 35 members was 0.6% higher in the third quarter than in the three months through June. This was a slowdown from the 0.8% growth recorded in the second quarter.
The deceleration underlines the underpowered nature of the global recovery from the financial crisis and the recession that followed.
The weakening of growth was largely due to Japan, but France and the U.S. also contributed.
Among the Group of Seven largest developed economies, Germany recorded the fastest growth and Japan the weakest, although figures for Canada aren’t yet available.
Despite the slight slowdown, OECD output was up 2.6% from the third quarter of 2016, an acceleration from the 2.4% year-to-year growth recorded in the second quarter.
That suggests developed countries and the global economy will post faster growth this year than last.
Moody’s Investors Service said last week it expects growth in the Group of 20 largest economies—which account for most of the world’s activity—will pickup to 3.1% this year from 2.5% in 2016, and to 3.2% in 2018.
“Accommodative monetary policy, lower fiscal drag and resilient business and consumer sentiment will support growth in advanced economies,” said Elena Duggar, an associate managing director at the ratings agency.
According to Consensus Economics, which tracks the economic forecasts of banks and other financial institutions, expectations for growth in 2018 have firmed over the past month.
The U.S. economy is now seen expanding by 2.5% in 2018, up from 2.2% in 2017. Economists at financial institutions are also more upbeat about the eurozone and Japan.
While those expected growth rates are an improvement on 2016 and previous years, they remain weaker than what was considered normal before the global financial crisis.
Source: The Wall Street Journal