OECD: less growth than previously expected

The Organization for Economic Cooperation and Development, which had already slashed its economic forecasts three months ago, trimmed its 2015 growth forecast to 3.0 percent from 3.1 percent and the 2016 forecast to 3.6 percent from 3.8 percent.

According to the Paris-based organization, prospects for growth in the United States have improved, at least for this year. The OECD raised its corresponding growth outlook for 2015 to 2.4 percent from 2.0, but lowered its 2016 forecast to 2.6 from 2.8 percent previously.

OECD urges Fed to end uncertainty

The OECD saw more arguments speaking in favor of the US Federal Reserve raising interest rates rather than keeping them unchanged at the Fed's policy meeting starting Wednesday.

"Raising interest rates now would remove uncertainty in the markets," OECD Chief Economist Catherine Mann said in an interview with Reuters. "The path matters four times as much as the timing."

Looking at the eurozone, the OECD outlook was the brightest in four years. Euro area growth was projected at 1.6 percent this year and 1.9 percent next year. However, the single-currency bloc should be growing as much as a full percentage point faster, Mann said, considering a weak euro, low interest rates and shrinking oil prices.

The eurozone's priority should be to repair its banking system and tackle bad loans, she said, rather than to expand the European Central Bank's bond-buying program as some economists had suggested in the face of weak inflation.

Concerns over China and Brazil

The OECD slightly lowered its growth estimate for China to 6.7 percent for this year and 6.5 percent next year after a string of disappointing data and stock market routs.

Brazil appeared to be a particularly weak spot in the global economic outlook. The OECD said the emerging economy would contract 2.8 percent this year and 0.7 percent next year as it struggled with collapsing prices of exported commodities.

tko/hg (Reuters/AFP)