OECD Growth Faltering

“Growth is turning out to be much slower than we thought three months ago, and the risk of hitting patches of negative growth going forward has gone up,” OECD Chief Economist Pier Carlo Padoan said during a presentation of the OECD’s latest Interim Economic Assessment. (For the detailed tables and charts, click here.)

OECD policy recommendations:
Monetary policy…”central banks keep policy rates at present levels, and barring signs of recovery, consider lowering rates when there is scope. Other monetary policy responses to the crisis could include further central bank interventions in securities markets, strong commitments to keeping interest rates low over an extended period and the withdrawal of monetary tightening in emerging economies.”

Fiscal policy… “to rebuild confidence it  is essential that countries take credible steps to curtail debt. Medium-term consolidation plans, however, must be accompanied by growth-friendly structural reforms. Credible fiscal frameworks may create room for short term fiscal stimulus if needed. The governance of the euro area in economic and fiscal matters must be improved. The process of capitalisation of banks should be accelerated, and support to their short-term funding needs should be addressed.”