Slow growth requires fiscal and structural policies, not just monetary: OECD – The Financial

The global economy is stuck in a trap of low growth requires more coordinated fiscal, monetary and structural policies to accelerate growth use, according to the report Global Economic Outlook the organization for Economic Cooperation and Development and identifies the threat to the prospects of young people and conditions of retirement for seniors not to boost productivity and potential growth.

“growth is flat in advanced economies has slowed in many emerging economies that have been the global locomotive from the crisis, “he said Jose Angel Gurria , Secretary General of the OECD and identified new challenges posed by the slow productivity growth and rising inequality. In presenting the report during the Meeting of the Council of Ministers and the Forum of the organization, held in Paris, France, warned the urgency to undertake comprehensive actions to ensure “adequate living standards for all” .

according to the Outlook, a weak business growth, slow investment, very moderate wages and slower activity in key emerging markets will contribute to have a modest growth of 2016 GDP Global 3 percent with a moderate increase in 2017 to 3.3 percent. It is expected that the zone of 34 OECD countries will grow 1.8 percent in 2016 and 2.1 percent in 2017.

“The longer continue the global economy into this trap of low growth, the more difficult it will be for governments fulfill their fundamental promises. The consequences to inaction in the policy area will be less career prospects for young people and lower retirement income for future pensioners, “said Catherine L. Mann, chief economist at the OECD.

the agency recommended the most comprehensive of the fiscal policy and use revival of structural reforms . The use of monetary policy is not sufficient to provide satisfactory results in growth and inflation.

“A further easing of monetary policy could now prove to be less effective than in the past and even counterproductive in some circumstances,” said the economist.

OECD is leeway in many countries to implement fiscal policies that strengthen the activity by way of public investment taking advantage of low interest rates long term.

“While almost all countries have scope for reallocating public spending towards more favorable for growth projects, collective action economies to increase public investment in projects with high impact on growth boost demand and improve fiscal sustainability, “said Mann.

Given the environment of growing income inequality prevailing in many countries, structural reforms particularly directed to the service sectors, can boost demand the short term and promote long-term improvements in employment, productivity growth and inclusion.

the report on the Economic Perspectives warns that the United States will continue to moderate recovery with GDP growth of 1.8 percent and 2.2 percent in 2016 and 2017; the euro zone will improve slowly at rates of 1.6 and 1.7 percent respectively. In Japan, an increase of 0.7 is estimated percent in 2016 and 0.4 percent in 2017.

With the continued readjustment China , it is expected that growth remains a trend less than 6.5 percent in 2016 and 6.2 percent in 2017, supported by demand stimulus. The deep recession in Russia and Brazil will persist, expecting a contraction in the latter of 4.3 and 1.7 percent in 2016 and 2017.