Global recovery on track but debt unsustainable: OECD

Global recovery on track but debt unsustainable: OECD

Paris: A fragile global economic rebound is set to gather momentum next year but debt in leading industrialised nations is expected to soar to record levels, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday.

The OECD raised the outlook by three quarters of a percentage point to 2.5% at the end of next year.

Average quarterly growth in OECD members should pick up from 1.75% at present to 2.5% in the latter half of next year and 3.0% in the second half of 2012, the OECD said in its latest economic outlook.

“The global economic recovery remains fragile but is broadly on track," the OECD said in a report published ahead of a summit of Group of 20 nations in Seoul later this month.

But it warned that the economic crisis of the last two years had “pushed public deficits and debt to unsustainable levels."

“Simply stabilising debt relative to gross domestic product in most countries will require a historical consolidation effort of anywhere from 6.0 to 9.0% of GDP," said OECD secretary general Angel Gurria.

“But in fact even more is needed to bring debt back to sustainable levels."