It is a pleasure to be here to present the OECD’s 2016 US Economic Survey. I would like to thank the US Administration ─ in particular Secretary Lew and his Treasury team ─ for their support and input on the Survey, and to Adam Posen and his staff for generously hosting us at the Peterson Institute.
Today’s theme – prospering in a low-growth era – suggests that growth rates have declined permanently and that we should focus on how to prosper in such new conditions. There are many problems facing us today not directly related to the pace of economic growth. Indeed, some challenges, like climate change, may actually be eased by slower growth.
Today we are launching two closely related OECD Economic Surveys, one on the European Union and the other on the Euro Area. How is Europe doing? Compared to the situation in April 2014, when the previous Surveys were released, there are reasons for optimism. Growth has picked up, if only gradually, and spread to virtually all EU countries.
It is a great pleasure to be in Prague to launch the 2016 Economic Survey of the Czech Republic. I would like to thank in particular the Minister of Finance as well as the Minister of Trade and Industry and their teams for their support and input on this Survey.
We see the world economy stuck in a low-growth trap. Global growth is projected to continue to limp along at around 3% this year, and to pick up only modestly in 2017. Moreover, this pick-up hinges on avoiding significant downside risks, such as Brexit and financial disruptions in emerging markets linked to high corporate debt and exchange rate risks.
Thank you for the invitation to share with you our views on how to get the global economy on a new growth path.
Leaving Europe would impose a "Brexit tax" on generations to come. Instead of funding public services, this tax would be a pure deadweight loss, with no economic benefit, said OECD Secretary-General in London.
A pick-up in global growth remains elusive. Disappointing data for the fourth quarter of 2015 has prompted further downward revisions to growth forecasts in most major economies. Global GDP growth is projected to remain at 3% in 2016 – the slowest pace in five years and well below long-run averages – with a slight improvement to 3.3% projected for 2017.
Despite some welcome rebound in financial markets, global growth prospects remain weak. The main challenges facing G20 policymakers of low growth, sluggish trade, sub-par investment, weak productivity gains, high unemployment and growing inequality – not to mention a number of remaining downside risks – are unresolved.
It is very important to put this study in context. During the past six years, Greece has gone through an unprecedented and very painful contraction. It is hard to think of any other OECD country that has experienced such economic hardship in recent times.