OECD calls US dip a blip, but chops world growth forecast

The OECD on June 3 sharply lowered its global growth forecasts for 2015 and 2016, dragged down partly by a "transitory" shortfall in US performance and by businesses and governments skimping on investment.

"Global growth is projected to strengthen in the course of 2015 and 2016, but will remain modest relative to the pre-crisis period," the Organisation for Economic Cooperation and Development said.
 
It predicted the world economy would grow at a rate of 3.1 percent this year, down from the 4.0 percent increase it projected in March.
 
The growth forecast for next year has been revised downward half a percentage point, from 4.3 to 3.8 percent, with an expectation that the world economy "will strengthen gradually to approach its past (pre-crisis) average pace by late 2016."  

The OECD, a policy analysis body grouping 34 advanced economies, slashed its outlook for the United States from 3.1 and 3.0 percent to 2.0 and 2.8 percent for this year and next.
 
The Paris-based think-tank said the stronger dollar and a brutal North American winter -- which it said caused "transitory disruptions" -- put a brake on growth in the first quarter of 2015, while predicting:

"Activity should regain steam, with aggregate demand propelled by continued employment gains, wealth effects from rising asset prices, and the boost to purchasing power from lower oil prices."  

China, too, will grow more slowly than the OECD predicted in March, by two-tenths of a percentage point lower in both years, at 6.8 percent and 6.7 percent in 2015 and 2016.    

"Consumption will remain robust" in China, where growth will also be spurred by stepped-up infrastructure investment, it said.
 
The OECD said that overall, ...