“The OECD has called for its rich-country members to ease up on austerity and collectively agree to spend more on infrastructure projects to boost flagging growth.
The Paris-based Organisation for Economic Cooperation and Development expressed concern about the state of the global economy as it cut growth forecasts made three months ago and warned that low interest rates and money creation by central banks were no longer enough for a lasting recovery.
Marking the latest stage in its shift away from support for austerity, the OECD criticised the over-reliance on monetary policy – low interest rates and the money-creation process known as quantitative easing – and urged that countries adopt a more balanced approach.
The OECD has in the past supported the deficit-reduction programme taken by the UK chancellor, George Osborne, but believes Britain should now join with other countries in spending more on public investment.
“A stronger collective policy response is needed to strengthen demand,” the OECD said in its interim economic outlook, which reduced growth estimates for every member of the G7 group of leading industrial nations – the US, the UK, Germany, Japan, Italy, France and Canada.
“Monetary policy cannot work alone. Fiscal policy is now contractionary in many major economies. Structural reform momentum has slowed.”
East Devon Watch 