The current state of the global economy, in 3 charts

How's the global economy doing? It's a mixed bag.
Written by Tyler Falk, Contributor

The Organisation for Economic Co-operation and Development's latest assessment of the global economy [PDF] is a bit of a mixed bag.

To put it briefly: Advanced economies are expanding, emerging economies are struggling.

First, a look at how the overall G7 economies (the largest economies, excluding China) are doing, highlighted by a better than expected second quarter of 2013:

The United Kingdom is expected to lead the G7 in growth with an estimated growth rate of 1.5 percent in 2013, up from 0.2 percent in 2012. The eurozone also bounced back this quarter seeing growth for the first time in six quarters.

The other good news for advanced economies? Business confidence and industrial production are up:

This measure of the manufacturing sector looks at five major indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment. Anything over 50 means an expanding manufacturing sector.

Of course, the global economy isn't just made up of wealthy nations. And that's where we come to the difficulties in emerging markets. As the OECD puts it: "In many emerging economies, however, loss of domestic activity momentum together with the shift in expectations about the course of monetary policy in the United States and the ensuing rise in global bond yields have led to significant market instability, rising financing costs, capital outflows and currency depreciations."

The rupee clearly isn't the only currency struggling.

But even though there's been a role reversal from recent years with advanced economies recovering and emerging economies slowing, OECD Deputy Chief Economist Jorgen Elmeskov reminds us there are plenty of risks that could impact everyone:

“The gradual pick-up in momentum in the advanced economies is encouraging but a sustainable recovery is not yet firmly established. Major risks remain. The euro area is still vulnerable to renewed financial markets, banking and sovereign debt tensions. High levels of debt in some emerging markets have increased their vulnerability to financial shocks. And a renewal of brinksmanship over fiscal policy in the US could weaken confidence and trigger new episodes of financial turmoil. ”

“Continued support for demand is still needed to make sure recovery takes hold, and it remains vital that this be complemented by structural reforms to boost growth, rebalance the global economy and avoid a ratcheting-up of structural unemployment.”

Read more: OECD

This post was originally published on Smartplanet.com

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