the outlook for the oecd economies and effects on lac: issues for panel discussion
TRANSCRIPT
![Page 1: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/1.jpg)
América Latina
The outlook for the OECD economies andeffects on LAC: Issues for panel discussionLuiz de Mello | 2014
A AMÉRICA LATINAE AS NOVAS CONDIÇÕESECONÔMICAS MUNDIAIS
seminário
![Page 2: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/2.jpg)
Luiz de Mello
OECD
FGV, Rio de Janeiro
19 September 2014
![Page 3: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/3.jpg)
Bumpy recovery in the advanced economies
◦ Headwinds from high unemployment and ongoing fiscal consolidation
◦ Activity has already slowed down in LAC (GDP growth < 2.5% in 2014)
Column1 2013 2014 2015
United States 2.2 2.1 3.1
Euro area -0.4 0.8 1.2
Japan 1.6 0.9 1.1
Germany 0.2 1.5 1.5
France 0.4 0.4 1.0
Italy -1.8 -0.3 0.2
United Kingdom 1.8 3.1 2.8
Canada 2.0 2.3 2.7
China 7.7 7.4 7.3
India 4.7 5.7 5.9
Brazil 2.5 0.3 1.4
GDP growth (OECD Interim Outlook) Per cent
Note: GDP at market value adjusted for working days. For
Germany and India, this measure may differ from national
headline measures.
![Page 4: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/4.jpg)
There are signs of a stabilisation of growth rates in the EMEs
◦ Not only PMI but also other leading indicators, like latest OECD CLIs
3
GDP growth and Composite PMI
-6
-4
-2
0
2
4
6
8
10
12
14
40
42
44
46
48
50
52
54
56
58
60
Per cent Index
Emerging Markets PMI (LHS)
BRIICS GDP growth (s.a.a.r.; RHS)
Note: PMI values above 50 indicate expansion.
Source: HSBC; Markit; OECD National Accounts database; and OECD
calculations.
![Page 5: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/5.jpg)
Slow growth in global trade and effect on commodity prices
◦ Global trade has been growing at much below pre-crisis trend since 2012
◦ LAC exports have lost steam, not least due to price effects
-20
-15
-10
-5
0
5
10
15
20
-20
-15
-10
-5
0
5
10
15
20
Pre-crisis average (1990-2007)
Global trade in goods and services Volumes, year-on-year percentage change
Source: OECD National Accounts database.
![Page 6: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/6.jpg)
Normalisation of monetary stance and its effect on appetite for risk and credit to EMEs
Rising current account deficits and more fragile external financing in LAC; stable external indebtedness but rising budget deficits
External credit shocks are good predictors of business cycle in LAC
![Page 7: The outlook for the OECD economies and effects on LAC: Issues for panel discussion](https://reader036.vdocument.in/reader036/viewer/2022062412/58f06b3c1a28aba9148b45ef/html5/thumbnails/7.jpg)
Short-term policy requirements
◦ Fiscal and monetary policy mix and ability to maintain counter-cyclical stance in the near term?
Longer-term agenda: remove structural impediments to faster growth
◦ Income gaps in LAC relative to OECD best performers are due essentially to lower labour productivity rather than lower utilisation
◦ Measures to enhance productivity growth in LAC?