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Modest global growth to continue: OECD

dpa logodpa 7/03/2017

Global economic growth is set to continue a "modest recovery," the Organisation for Economic Cooperation and Development says.

Global economic growth is set to continue a "modest recovery," the Organisation for Economic Cooperation and Development (OECD) says.

The Paris-based grouping of mainly developed countries nevertheless noted significant risks, especially in middle-income and developing countries that it said were vulnerable to external shocks and exchange rate mismatches.

The OECD maintained its predicted rate of global GDP growth at 3.3 per cent in 2017 and 3.6 per cent in 2018, in the mid-term update of its six-monthly global economic outlook last published in November.

Its biggest adjustment was for Britain, where it revised expected GDP growth in 2017 upwards from 1.2 to 1.6 per cent, but stuck with a forecast of one per cent growth in 2018.

The organisation said fiscal policy should be used to boost demand, especially if coupled with structural reform.

With lower interest rates, many countries can afford to take on new debt to finance initiatives boosting growth and employment, especially if those are coupled with structural reform, it argued.

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