Eurozone nations are falling far behind the US and Canada as a fragile recovery takes root in advanced economies, the Organisation of Economic Co-operation and Development (OECD) said yesterday, advising central banks to keep easy money flowing so the rebound does not prove short-lived.
The Paris-based OECD forecast that the G7 advanced economies were on course for average annualized growth of 1.9 percent in both the first and second quarters, although rates varied widely.
An improving US labor market would help the world’s biggest economy grow 2.9 percent in the first quarter on the same basis, and 2.8 percent in the second quarter, the OECD said.
Its latest predictions were contained in a brief report in which it gives quarterly estimates for a handful of countries ahead of a fuller publication in May. The report was broadly more optimistic than a previous one.
As unemployment fell in the US, confidence was firming, particularly among households, while easy financial conditions were helping them rebuild their strained budgets, the OECD said.
“Monetary policy needs to be supportive in the medium term to allow this process to continue,” OECD chief economist Pier Carlo Padoan told journalists.
With the eurozone creeping out of a sovereign debt crisis, the recovery would be weakest there, with the economies of France and Italy in contraction in the first quarter and Germany eking out growth of only 0.1 percent.
Grappling with weak industrial production and fragile household confidence, Italy would be mired in recession as its economy contracted an annualized 1.6 percent in the first quarter and 0.1 percent in the second quarter, the OECD estimated.
Organisation of Economic Co-operation and Development Secretary-General Angel Gurria called on Tuesday for eurozone nations to ramp up the size of their rescue fund, judging that the debt crisis was not over, with banks still weak, debt still rising and fiscal targets far from assured.
Outside the eurozone, Britain’s economy was seen contracting an annualized 0.4 percent in the first quarter before posting growth of 0.5 percent in the following quarter.
In light of the still shaky nature of the recovery, the OECD said that central banks should be prepared to keep interest rates low and maintain other crisis measures “for a considerable time to come.”
With their balance sheets loaded up to record levels, the European Central Bank and the US Federal Reserve are facing growing calls to consider unwinding the unconventional measures they have adopted in the last three years to stave off financial meltdowns.
Among risks to the overall outlook, the OECD estimated that surging oil prices, which have risen 15 percent since the start of the year, would add a quarter of a percentage point to inflation in developed countries and knock between 0.1 and 0.2 percent off growth on average over the next year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day