PARIS -- In its latest Economic Outlook, the Organization for Economic Cooperation and Development (OECD) said that while many of its 34 members will continue to be constrained by fiscal consolidation and weak credit markets, "a moderate cyclical upturn is getting underway in China, while a more hesitant pick-up in growth is seen to take place in India."
The group said major emerging economies should be robust and outperform developed countries, although it trimmed its forecasts for this year and next.
Nevertheless it now expects China -- the world's second largest economy and which is not an OECD member -- to post in 2013 growth that is "subpar for the second consecutive year" at just 7.8%.
China's economy grew by 7.8% in 2012, its slowest pace in 13 years, in the face of weakness at home and in key overseas markets.
Recent data has pointed to weakness in the Chinese economy with manufacturing activity contracting in May for the first time in seven months, according to a key survey. The new forecast is a sharp cut from the 8.5% the OECD had in its previous semi-annual Outlook report in November.
But "given strong credit growth and the support provided by higher public social and infrastructure spending, a return to robust, albeit unspectacular, growth appears likely during the rest of this year and the next," said the OECD.
For next year, it revised down its estimate for China's gross domestic product growth to 8.4% from 8.9%.
It added that "with low inflation and substantial slack there may be room for some monetary relaxation" to support growth. Chinese inflation is projected to remain steady 2.5% this year and 2.6% in 2014, down from 5% in 2011.
While India last year recorded its weakest growth in a decade at 3.8% on slumping demand, the OECD said the economy there is expected to gradually pick up pace.
This will be in part due to moves to make it easier for foreigners to make direct investments in the country as well as signs that large investment projects may soon get underway as approval procedures are sped up.
The OECD now expects India's GDP to grow by 5.3%, down from its previous forecast of 6.5%.The 2014 projection was revised down to 6.4% from 7.1%.
Adding in Brazil and Russia as well, the report concluded that growth in the world's major emerging economies "will remain much more robust than in the OECD economies" and said this trend is "expected to strengthen modestly" through the end of next year.
Brazil's economy is forecast to grow by 2.9% this year 3.5% in 2014.
Russia is seen as growing by 2.3% this year 3.6% in 2014.
-Louise Nordstroem, AFP
Copyright Agence France-Presse, 2013
