OECD countries maintained growth

In the second quarter, the total GDP of the OECD countries in real terms increased by 0.3% compared to the first three months of the year. The same figure was in the first quarter. The growth of the economies of the seven most developed countries (G7) accelerated from zero to 0.2%, according to the OECD survey. This change in the indicator was influenced by a noticeable acceleration in the growth of the economies of France (up to 0.5% in the second quarter after falling 0.2% in the first), Japan (up to 0.5% from zero growth) and Italy (up to 1% from 0.1 %).

US GDP contracted for the second quarter in a row, but this decline was minimal (0.1% after 0.4% in January-March). It also improved the G7’s overall stats. At the same time, a significant drop in growth rates was recorded in Germany (down to 0.1% from 0.8%) and in the UK (down to minus 0.1% after an increase of 0.8%). In another dimension, year-on-year, growth slowed in the second quarter in all G7 countries except Japan and Canada.

It should be noted that the continued growth in the EU countries is combined with record high inflation (in July – 9.8% in annual terms). Council member of the European Central Bank (ECB) Isabelle Schnabel at the annual economic symposium in Jackson Hole, USA, confirmed that regulators now have no alternative to fighting rising prices, because “if inflation expectations get out of control, it could get worse.”

In the US, the prospects for economic growth remain vague – as confirmed by the speech at the symposium of the head of the Federal Reserve System (FRS) Jerome Powell (see Kommersant of August 29). He acknowledged that a policy of high rates would slow the economy and potentially lead to job losses in the US, but stressed that “failure to restore price stability will bring much more pain.” Jerome Powell said that the Fed should not ease policy even if there are signs of a reversal in the inflationary trend – so as not to repeat the mistakes of the 1970s, when the regulator periodically raised and lowered rates, which ultimately did not allow inflation to be cured. However, Leonardo Melosi of the Reserve Bank of Chicago and Francesco Bianchi of Johns Hopkins University are not sure that the Fed will be able to single-handedly slow down inflation by raising the rate – since, in their opinion, about half of the price increase is provided by the previous “expansionary fiscal policy” aimed at stimulating growth GDP.

Georgy Smirnov