OECD Member Nation Growth Slows, May Signal Stalling Global Economy

The Organization for Economic Cooperation and Development (OECD) issued a report on member nation economic performance in the second quarter of 2015. Unfortunately, the numbers were not promising: it reveals that the combined economic growth of the OECD’s member nations fell to 0.4 percent in the second quarter of 2015.

The Organization for Economic Cooperation and Development (OECD) issued a report on member nation economic performance in the second quarter of 2015. Unfortunately, the numbers were not promising: it reveals that the combined economic growth of the OECD’s member nations fell to 0.4 percent in the second quarter of 2015.

According to a report by Economia, this news reveals a deceleration in overall growth from the 0.5 percent quarter-on-quarter growth achieved by OECD members for the first quarter of 2015. This number is the lowest rate of quarterly growth seen by the 34 OECD nations in over a year. As a result, some analysts have already suggested this may represent a stall in the global economy.

Many blame the economic slowdown in China for much of this situation. Undeniably, China’s own economic struggles have affected its own economy and trickled into the larger market. China seems unlikely to reach its government-established target of seven percent GDP growth for 2015; already the lowest target set by the nation in 25 years.

The slowdown led to a devaluation of the Yuan, which surprised many. The Chinese stock market has also run like a rollercoaster for much of the year despite government efforts to calm reactionary markets. Stabilizing efforts have included repeated interest rate cuts (so far, five in nine months), but little has seemed to help reinforce the flagging national growth rate.

Economists are watching the Chinese situation closely due to the size of the nation’s economy and it potential impact on global markets. As the second largest economy in the world, a recession or crash could have implications nearly as dire as what occurred after the housing bubble burst in the United States in 2008, leading to both a domestic and global recession.

Of the OECD’s members, the United Kingdom had the fastest rate of growth among major economies, reaching 0.7 percent expansion. The United States came in second with a 0.6 percent rate of growth. Nevertheless, the OECD’s overall prediction for the UK’s annual growth dipped from a prior prediction of 2.7 percent to a slightly more modest 2.6 percent. Contrary to the overall performance of the rest of the world, the Confederation of British Industry (CBI) actually upgraded its GDP growth forecast for 2015 for the UK from 2.4 percent to 2.6 percent.

While the predictions for the majority of OECD members were generally less than glowing, not all of the news was negative. The OECD’s annual prediction for year-on-year global GDP growth remained steady at 2 percent.