OECD sees growth picking up in major economies

Economic growth in most major economies – both advanced and emerging – including the US, Europe, Russia, Canada, China and India, is set to pick up, according to the Organisation for Economic Cooperation and Development (OECD).

The Paris-based association said, with the euro zone economies gathering momentum and its debt crisis subsiding, the outlook for many parts of the global economy is improving as 2013 draws to a close, and that there could be a broader global recovery in the early part of 2014.

OECD said its composite leading indicator, covering 33 member countries, indicated growth had returned to its long-term trend rate.

The composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, show signs of an improving economic outlook in most major economies.

''The CLIs point to economic growth above trend in Japan, and to growth firming in the United Kingdom. The CLI for Canada indicates a positive change in momentum. In the United States, the CLI points to growth around trend.

''In the Euro area as a whole, in France and in Italy, the CLIs continue to indicate a positive change in momentum. In Germany, the CLI points to growth firming.

''In the emerging economies, the CLIs point to growth around trend in Brazil and to a tentative positive change in momentum in China, Russia and India,'' OECD said.

The indicator, which is designed to flag turning points in the economic cycle, edged up to 100.7 in October from 100.6 in September. That put it further above the long-term average of 100 and reaching its highest level in over two years.

The reading for the euro area rose to 100.9 from 100.7 in September, which was indicative of a "positive change in momentum," the OECD said in a statement.

European powerhouse Germany saw its reading rise to 100.7 from 100.5. France saw its indicator improve to 100.2, from the long-term trend rate of 100.0 in September.

The OECD said the US economy, the world's biggest, was running near its trend rate with a stable reading at 100.8. The Japanese economy was seen at above-trend speed at 101.3, up from 101.1 in September.

The OECD had, last month, trimmed its global growth forecast for next year to 3.6 per cent from 4.0 previously. A slowdown in emerging market economies was putting a drag on growth, it said, and advanced economies were struggling to pick up the slack after years of debt crises.

The October indicators for China, India and Russia showed tentative positive changes in momentum. China's reading rose to 99.4 from 99.2, India's was stable for the fourth month in a row at 97.6 and Russia's was unchanged at 99.7.

The OECD's leading indicators are designed to provide early signals of turning points between the expansion and slowdown of economic activity, and are based on a wide variety of data series that have a history of signalling changes in economic activity.