In its latest economic outlook, the Organization for Economic Cooperation and Development (OECD) foresees moderate growth around the world next year. But pre-crisis levels will not be hit because of lower investment.
Global growth is projected to strengthen moderately this year and beyond, the OECD says in its latest World Economic Outlook. It adds that GDP expansion will not compare favorably to pre-financial-crisis levels, but penciled in 3.1 percent growth globally for this year and 3.8 percent for 2016.
The organization points out that a lot will hinge on how global and regional risks will impact investment and trade activities in the world's leading industrialized nations as well as in emerging economies.
The OECD said potential effects of continued geopolitical upheavals like the one in Ukraine as well as the risks stemming from a potential disorderly exit from near-zero interest rates in the US could weigh on growth prospects. It also cited Greece's failure to reach a satisfactory agreement with its creditors and an economic slowdown in China as reasons for concern.
China's economy is predicted to edge down as the restructuring of the world's second largest economy is in full swing, with services taking over from investment and real estate as the main driver of growth there.
By contrast, gross domestic product in the emerging economies of Brazil and Russia is projected to grow again in 2016, ending recession in both countries.
The OECD expects the eurozone to log 2.5 percent growth in 2016, with inflation edging up to around 1.5 percent and unemployment falling only gradually in the 19-member bloc sharing the euro currency. The German economy is bound to expand by 2.4 percent next year, up from 1.8 percent this year.
The jobless rate in the OECD area has already fallen by little over 1 percent from its 2010 peak and is expected to drop further to 6.5 percent by the end of next year.
"Even then, 40 million people will still be out of work, that's 7.5 million more than immediately before the [global financial] crisis," the OECD warned.