Economic growth continued in the second quarter of 2013, albeit at a relatively slow pace, in North America, Japan and the UK, and the eurozone emerged from the recession, the Organisation for Economic Co-operation and Development (OECD) said in its most recent report. While some eurozone countries continue to struggle, the eurozone as a whole is now registering economic growth, with Germany expected to experience 2.5% economic growth in 2013, and France projected to grow by 1.5%.

Global growth in the near term is expected to remain sluggish, as the continued slowdown in large emerging economies such as India and Indonesia, which according to the OECD “account for a large share of the world economy”, will affect gains made by recovering developed economies. China, which experienced a slowdown in the first half of this year, will grow by 8% by the year’s end, yet this will still be a marked deceleration from preceding years.

A significant consequence has been the reversal of capital flows, from emerging economies back to advanced economies. Signs of a stronger recovery in advanced economies, coupled with an expected 'tapering' of the US Federal Reserve’s quantitative easing programme, have fuelled market instability and capital outflows from several major emerging economies back into OECD economies.

Speaking at the launch of the Interim Economic Assessment Report in early September, Jorgen Elmeskov, the OECD deputy chief economist, maintained a bearish assessment. “Major risks remain,” he said. “The gradual pick-up in momentum in the advanced economies is encouraging but a sustainable recovery is not yet firmly established. The euro area is still vulnerable to renewed sovereign debt tensions, [and] high levels of debt in some emerging markets have increased their vulnerability to financial shocks.”

Although the report appeared cautiously optimistic about the OECD’s prospects as a whole, Mr Elmeskov maintained that fiscal consolidation policies need to be upheld, in order to prevent the high rates of unemployment across the OECD from being entrenched. Indeed, unemployment across the eurozone and the US, which currently stands at 12% and 7.5%, respectively, remains much higher than before the global economic crisis. As a result, the OECD called on governments to implement effective training programmes, as well as reform tax benefit systems, in order to reduce joblessness among young people.