The OECD has sent out a stark warning the global economic recovery could spiral into stagflation on the back of rising oil and commodity prices.
In its latest economic outlook, the group's chief economist Pier Carlo Padoan said this will lead to stagnant growth and high inflation in some countries.
He added the recovery will remain at a "delicate" stage until more jobs are created.
"There are downside risks, including the possibility of further increases in oil and commodity prices," said Padoan.
"There is concern if downside risks reinforce each other, their cumulative impact could weaken the recovery significantly, possibly triggering stagflation in some advanced economies.
"The top challenge facing countries continues to be dealing with widespread unemployment, which affects more than 50 million people in the OECD area."
Padoan warned other headwinds include a weakness in housing markets reigniting but added this could be offset if the private sector receives a boost from a pick-up in consumer confidence.
"The recovery is becoming self-sustained, with trade and investment gradually replacing fiscal and monetary stimulus as the priniciple drivers of economic growth," he said.
"Confidence is increasing, which could add further buoyancy to private sector activity."
Source: www.investmentweek.co.uk
In its latest economic outlook, the group's chief economist Pier Carlo Padoan said this will lead to stagnant growth and high inflation in some countries.
He added the recovery will remain at a "delicate" stage until more jobs are created.
"There are downside risks, including the possibility of further increases in oil and commodity prices," said Padoan.
"There is concern if downside risks reinforce each other, their cumulative impact could weaken the recovery significantly, possibly triggering stagflation in some advanced economies.
"The top challenge facing countries continues to be dealing with widespread unemployment, which affects more than 50 million people in the OECD area."
Padoan warned other headwinds include a weakness in housing markets reigniting but added this could be offset if the private sector receives a boost from a pick-up in consumer confidence.
"The recovery is becoming self-sustained, with trade and investment gradually replacing fiscal and monetary stimulus as the priniciple drivers of economic growth," he said.
"Confidence is increasing, which could add further buoyancy to private sector activity."
Source: www.investmentweek.co.uk
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