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A muted recovery is forecast for U.S. and global economies

The Organization for Economic Cooperation and Development warns, however, that U.S. fiscal policy risks and European debt crisis could cause another recession.

November 27, 2012|By Don Lee, Los Angeles Times

The report notes that spending cuts throughout OECD member countries have taken a toll on economic growth, particularly in the Eurozone, where GDP growth for next year was slashed to -0.1% from a positive rate of 0.9%.

Many developed countries are now struggling with financial and economic challenges related to an aging population, large public debts and high unemployment.

Assuming Europe's debt crisis stabilizes, the Eurozone is forecast to recover in 2014. For OECD countries overall, GDP growth is projected to pick up in 2014 to 2.3%.

The U.S. economy is expected to outperform most other OECD nations in 2014, with its GDP stepping up to a more sturdy growth of 2.8%. That compares with the Fed's forecast of 3% to 3.8% growth in 2014.

Either way, U.S. economic growth isn't likely to come close to keeping up with the rapid advance of developing countries, notably China.

Last year, the U.S. accounted for 23% of the global economy, with the Eurozone and China tied for second, each with a 17% share each.

But by 2030, the OECD estimates, China's share of the global economy will rise to 28%, while the U.S. will slip to No. 2 with 18% of world GDP, and the Eurozone's share will fall to 12%.

don.lee@latimes.com

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