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Annual inflation in the G20 area was 3.0% in the year to August 2013, down from 3.2% in the year to July 2013.
Growth rates in the major advanced economies picked up in the first half of 2013 and should be maintained through the second half of the year. Activity is expanding at an encouraging pace in North America, Japan and the United Kingdom, while the euro area as a whole is no longer in recession.
Real GDP in the OECD area increased by 0.5% in the second quarter of 2013, compared with 0.3% registered in the previous quarter.
There is no simple remedy for fixing the post-crisis global economy. But three key ingredients for sustainable long-term growth are jobs, equality and trust, said OECD Secretary-General in Washington.
The current political deadlock in the United States is needlessly putting at risk the stability and growth not only of the US but also the world economy. This comes at a time when a fragile recovery in advanced economies was underway, and when a number of emerging economies were already facing new risks.
Composite leading indicators (CLI) continue to signal improvements in growth in most major OECD countries with divergent patterns among large emerging economies.
The recent crisis has revealed large differences in external competitiveness between euro area member countries. Since nominal exchange rate devaluation is not an option for members of a currency area, governments in troubled member countries have been considering so-called fiscal devaluation, i.e. a shift from employers’ social security contribution to value added tax, as an alternative means to restore competitiveness.
This slowdown in the annual rate of inflation mainly reflects a sharp deceleration in energy price inflation, to 1.7% in the year to August.
Today, the region’s economic outlook is rather promising, but they should be no cause for complacency as Africa is still facing multiple economic and social challenges.
Despite sustained efforts made in recent years to rein in budget deficits, a majority of OECD countries still face substantial fiscal consolidation needs. The choices made about which spending areas to curtail and which taxes to hike will have implications for near-term activity and long-term growth as well as for equity and the current account.