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OECD: Slow Recovery, Happiest in Australia …

  • May 30th, 2013
  • Posted by Editor EUAustralia

EnergyModest economic growth is expected for Europe, Australia and the United States, with stronger performances in other countries, according to the Paris based OECD; which has also just dubbed Australia the “happiest”: of countries.

GRADUAL AND FITFUL UP-TURN

OECDThe Secretary-General of the research organisation, Angel Gurría, released the May edition of its bi-annual Economic Outlook at a media conference in Paris (29.5.13), saying the global economy was strengthening gradually, though the upturn remained weak and uneven.

“Supportive monetary policies, improving financial market conditions and a gradual restoration of confidence are at the root of the recovery”, he said.

“Also, the fiscal adjustment of the last few years is beginning to pay off: Several countries are close to stabilising their government debt-to-GDP ratios and ensuring a gradual decline in indebtedness over the longer term.”

Details:

World real gross domestic product (GDP) is projected to increase by 3.1% this year and by 4% in 2014. Across OECD countries, GDP is projected to rise by 1.2% this year and by 2.3% in 2014, while growth in non-OECD countries will rise by 5.5% this year and 6.2% in 2014.

 In the United States activity is projected to rise by 1.9% this year and by a further 2.8% in 2014. GDP in the Euro area is expected to decline by 0.6% this year and then rebound by 1.1% in 2014, while in Japan GDP is expected to grow by 1.6% in 2013 and 1.4% in 2014.

AUSTRALIAN ECONOMY

Uluru ElenaFor Australia, the OECD picture, which draws extensively on figures generated in the country under review, confirmed current expectations there.

The Australian economy has slowed down; the current wind-down of construction of mines would mean a subsidence of that boom, and then production and export from such mines should back a softer recovery.

Said the report: “GDP growth is likely to slow temporarily to 2.5% in 2013 before picking up to around 3.25% in 2014. The expected weakening of the boom in mine investment will be only gradually offset by the sector’s increasing export capacity and the strengthening of the non-mining sector. The persisting high exchange rate and still fragile confidence are inhibiting the emergence of new drivers of growth… The authorities need to gradually balance the public budget so as to restore fiscal leeway. Should activity worsen significantly, however, there is scope for fiscal policy to be relaxed to support demand …”

DEVELOPMENT AID

AusAidSo saying, in effect, the Australian economy looks sound enough and anything but a banana republic slipping on its skins; the OECD has also urged a still-better performance in sharing around the prosperity, through overseas development aid.

A report on 6.5.13 said Australia had delivered USD 5.44-billion (A$5.61-billion; xe.com, 30.5.13) in official development assistance (ODA) last year, or 0.36% of its gross national income:

“It is the eighth most generous country in the OECD’s Development Assistance Committee (DAC), which groups the world’s major donors.

“Australia’s goal is to reach 0.5% of GNI by 2017 – a goal the DAC encourages it to follow through on, given its good track record and relatively strong economy.”

(In another prod, to make Australia virtuous,  OECD websites note that the country’s use of renewable energy is 5.2% of total use; so far well short of its own medium term goal of 20%, or the EU’s 20% by 2020).

DON’T WORRY, BE HAPPY

Happy FaceYet giving may be the path to happiness.

Australia has come out number 1, for the third year, on the “better life” index, a score relating to happiness.

Says the latest report on that, 28.5.13: “Australia performs exceptionally well in measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index.

“Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Australia, the average household net-adjusted disposable income is 28 884 USD (A$29824) a year, more than the OECD average of 23 047 USD (A$23799) a year.

“But there is a considerable gap between the richest and poorest – the top 20% of the population earn six times as much as the bottom 20%.”

Other measures on the scale, contributing to the ranking received, are employment, education (reading, literacy, maths and science, especially), health care and life expectancy, and in the “public sphere”, factors like high voter turnout (which Australia puts in the bag, competitively, by making it compulsory).

Last but not least is a factor to do with going about feeling happy:

“In general, Australians are more satisfied with their lives than the OECD average, with 84% of people saying they have more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness, boredom, etc). This figure is higher than the OECD average of 80%.”

Other high rating states for a “better life” include Sweden and Norway, and Switzerland; returning the discussion to the opening point, that money might well account for much of this joi de vivre.

The OECD, based in Paris, is a cooperative body of 34 leading economic states, initially formed in the post-war era to provide information for reconstruction programs, and continuing now as an agency for collaborative global economic management and development.

Reference

OECD, Paris, Australia can deliver a growing aid budget effectively and efficiently, 6.5.13. http://www.oecd.org/australia/australiacandeliveragrowingaidbudgeteffectivelyandefficiently.htm, (30.5.13).

OECD, Paris, Better Life Index – Australia, 28.5.13. http://www.oecdbetterlifeindex.org/countries/australia/, (30.5.13).

OECD, Paris, Economic Outlook, May 2013. http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-outlook-volume-2013-issue-1_eco_outlook-v2013-1-en, (30.5.13).

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