The Organization for Economic Cooperation and Development recently released a report observing that high unemployment will remain a threat for at least three years after the financial crisis, according to a New York Times article by David Jolly. The economy has shifted into a “self-sustaining recovery” and “the private sector is driving growth,” says Pier Carlo Padoan, the organization’s chief economist.
The O.E.C.D released its Economic Outlook report and projects global GDP to grow by a “healthy 4.2 percent this year and by 4.6 percent in 2012.” However, those figures are inflated by increased growth in emerging economies. For the 34 countries that the O.E.C.D. represents, the GDP is expected to grow at 2.3 and 2.8 percent respectably. For United State alone, the report forecasts GDP to rise by 2.6 percent this year and 3.1 percent in 2012.
The report says, “high unemployment remains among the most pressing legacies of the crisis and that should prompt countries to improve labor market policies that boost job creation and prevent today’s high joblessness from becoming permanent.” The report also calls on governments to provide additional employment training and to consider employment tax cuts to help promote hiring.
Other downside risks such as high energy and commodity prices, and the crisis among euro states remain for the global economy. Mr. Padoan says, “There is a concern that these downside risks could accumulate and possibly prompt some stagflation risks in some advanced economies.”