The Organization for Economic Cooperation and Development has warned slowing growth in emerging nations may harm the global economic recovery. Lower trade and investment will be just some of the side effects.
Presenting its latest outlook in Paris on Tuesday, the OECD forecast the world economy would grow by 3.6 percent next year, down from the 4 percent the organization expected for 2014 in its previous twice-yearly report back in May.
"We've lowered our forecasts for many reasons," OECD chief economist Pier Carlo Padoan told Reuters news agency. "The most important one is the downgrade in growth in the emerging countries," he added.
Padoan warned advanced economies in the west would not be able to make up for the momentum lost by many emerging nations. He said the latter had been hit hard by capital outflows triggered by the US Federal Reserve's plans to rein in its large-scale easy-money stimulus program.
Eurozone remains in focus
The OECD report expected India and Brazil to experience the most dramatic slowdowns, while China was poised for 8.2-percent growth in 2014, down from 8.4 percent in the organization's last outlook.
The report confirmed the eurozone was set to grow at a snail's pace. But the OECD conceded the 17-member bloc faced fewer acute risks than in the past few years.
The euro area's lenders were still seen as fragile. "To guard against this, the establishment of a fully fledged banking union needs to be expedited," the OECD advised.
hg/se (dpa, Reuters)