Think-tank claims UK economy will grow fastest
Friday 21 June 1996
The Organisation for Economic Co-operation and Development has revised up its outlook for the UK in its half-year forecasts for member economies, only a few weeks after downgrading it. It predicts growth of 2.2 per cent this year and 3 per cent next.
However, a recovery in growth in the rest of Europe later this year will not be strong enough for Germany and France to qualify for the single currency on time, according to the OECD.
In contrast to the European Commission's recent optimism that the two key countries could scrape below the Maastricht Treaty ceiling for government deficits as a proportion of GDP in 1997, the Paris-based think-tank predicts that only Denmark and Ireland will qualify in time.
The OECD's pessimism about the prospects of France and Germany cutting their government budget deficits below the 3 per cent of GDP target arises from its scepticism that announced spending cuts will be implemented. In contrast, the European Commission assumed the respective governments will deliver all the spending cuts they have promised.
Restoring the health of public sector finances is the most pressing problem facing OECD countries, says the report.
Current fiscal policies are unsustainable, it argues, but the OECD is very upbeat about the short-term economic outlook. The next two years will bring sustainable growth, with a recovery on the Continent and in Japan, and low inflation.
The OECD predicts the German deficit will decline to 3.6 per cent of GDP in 1997, although it notes that this would correspond to a figure below 3 per cent, adjusting for the stage of the business cycle. It puts the French government deficit ratio at 3.7 per cent of GDP.
On the brighter side, the OECD says most member countries have come close to achieving price stability. It forecasts continued growth in the US and a firmer recovery in Japan.
The report says ``judicious'' monetary easing is required on the Continent, especially as budget cuts get under way.
- 1 PlayStation and Xbox hacked by Lizard Squad
- 2 Christmas comes early to Hong Kong, as millions of bank notes spill out onto busy street
- 3 The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
PlayStation and Xbox hacked by Lizard Squad
Antonio Martin shooting: Black teenager may have tried to ambush patrolman, says police officer's lawyer
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
Boxing Day snowfall set to push even more bargain-hunters online for sales
The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...