Australia is not mentioned once in this up to date rveiew of the real and severe problems in the global economy. Having said that, the story is as much about Australia’s economy as any of the countries actually referred to. Now, why should we get to grips with this sort of analysis? One important reason: it helps very much to understand not so much the effects of unemployment and underemployment but very much the causes of unemployment and what might be the best immediate and also medium to longer term policies to deal with the causes and also the effects.
Stock markets in the major economies continue to hit new highs. At the same time, economic growth in the major economies is either slowing down or already at a relatively low level. The UN now forecasts that the global economy, including fast-growing India and high rate China, will expand in real terms (after inflation) by just 2.8% this year. Thus the UN joins the IMF and the World Bank in reducing its growth forecast for this year to around 3% for the world.
And in its semi-annual economic outlook released this week (http://www.oecd.org/economy/strengthening-investment-key-to-improving-world-economy.htm), the OECD has also reduced its forecast for global economic growth. It warned that weak investment and disappointing productivity growth risk keeping the world economy stuck in a “low-level” equilibrium. The OECD now expects the global economy to expand this year by 3.1%, a sharp downgrade from last November’s forecast of 3.7%. The revision follows…
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