its latest twice-yearly global assessment, the OECD warned that the
world economy is “stuck in a low-growth trap”. The organisation said
monetary policy alone could no longer be relied on to deliver growth and
governments should be using the fiscal tools at their disposal, such as
increases in investment spending, to stimulate demand. It also pointed
to several downside risks to global growth, the most immediate of which
would be if Britain votes to leave the European Union in a referendum on
The OECD forecast that Brazil’s economy will shrink by 4.3% this year.
Official data this week showed that the country’s GDP contracted by 5.4%
in the first quarter compared with the same period last year. Although
bad, many economists were expecting the figure to be much worse.
Shinzo Abe, Japan’s prime minister, delayed a controversial rise in the
country’s sales tax until 2019. The increase, from 8% to 10%, was
supposed to take place next April, having already been postponed once.
An initial rise in the tax in 2014 was widely blamed for throwing Japan
India’s economy grew by 7.9% in the first three months of the year
compared with the same quarter in 2015. For the fiscal year ending March
31st GDP rose by 7.6%, the fastest pace in five years. The government
was quick to take the credit, pointing to its pro-business reforms. But
India’s impressive figures came with the usual warnings about their
reliability. Other indicators, such as weak private investment and
exports, suggest the economic picture is more mixed.
Consumer spending in America grew by1% in April compared with March, the
biggest increase in nearly seven years. The data will be taken as more
evidence that the economy is racing ahead by those who want the Federal
Reserve to lift interest rates again this month.
Martin Senn, who stepped down as chief executive of Zurich Insurance in
December, committed suicide at his holiday home in Klosters. Three years
ago the company’s finance director also took his own life, prompting
soul-searching about the stresses faced by busy executives. An
independent investigation into that incident concluded that the
insurer’s leadership was not putting undue pressure on management.