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World faces ‘dangerous’ economic cocktail: OECD

Organization for Economic Cooperation and Development (OECD) Secretary General Angel Gurria.

YURIKO NAKAO/REUTERS

The world faces a "dangerous" cocktail of low growth and high unemployment, OECD chief Angel Gurria said Tuesday, after the global body warned of weak prospects for major economies.

The Organization for Economic Co-operation and Development (OECD), in its latest global overview, said this month leading indicators for the 34-nation body point to "weakening growth in coming quarters" for most major economies.

"You have a problem of high unemployment especially among the youth – growing inequalities and low growth – and in some cases contracting growth," Gurria said at an OECD conference in New Delhi on measuring global well-being.

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"Like the James Bond cocktail – when you shake together and do not stir – you have a very, very dangerous combination," he told a news conference.

Some 50 million people are unemployed in OECD countries – 15 million more than in 2008, Mr. Gurria said.

"Five years on (after the onset of the global financial crisis), it is still ongoing," said Mr. Gurria, secretary-general of the Paris-based organization that groups the world's leading industrialized democracies.

Unemployment in Greece is at a record 25.1 per cent as its economy contracts, while in Spain the jobless rate is 24.6 per cent as the government implements austerity measures to fend off a sovereign bailout.

The gap between rich and poor is now at its widest in 30 years with governments facing a loss of confidence in their ability to deal with boosting growth, tackling debt and making the financial sector more stable, Mr. Gurria said.

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