PARIS -- The world economy is growing faster than it has in seven years, and more and more people are working -- but the high growth isn't expected to last long, and wages remain stubbornly stagnant.
That's according to forecasts Tuesday from the Organization for Economic Cooperation and Development, which urged governments to do more to ensure longer-term growth and better living standards across the board.
The group, which recommends policies for leading economies, predicts sustained growth in the U.S. this year and next and a sharper-than-expected increase in the countries that use the euro currency.
For 2019, however, the group forecasts "a tempering of growth rather than continued strengthening."
Chief Economist Catherine Mann urged faster retraining of workers for advanced technologies, extending retirement ages, investing in renewable energy and simplifying tax rules to reduce risks of a new downturn.
"We've got wind under the wings but we're flying low," she said at the group's headquarters in Paris.
The agency slightly raised its global growth forecast to 3.6 percent this year -- the highest since the post-crisis upturn in 2010 -- thanks to rising industrial production, trade and technology spending.
But that "remains modest by past standards," the group said.
Globally, it forecasts 3.7 percent growth next year with a slight drop to 3.6 percent in 2019.
In the United States, the Organization for Economic Cooperation and Development inched up its outlook, predicting 2.2 percent growth this year and 2.5 percent in 2018 thanks to "buoyant asset prices and strong business and consumer confidence." It expects U.S. growth to fall back to 2.1 percent in 2019.
The group cautioned that its forecasts are clouded by uncertainty over President Donald Trump's tax policies and risks of protectionist trade moves. Trump campaigned to protect manufacturing jobs in the U.S. and renegotiate international trade deals he sees as unfair.
The long-troubled eurozone enjoyed another boost as the Organization for Economic Cooperation and Development became the latest group to raise its forecasts for the 19-country region. Tuesday's report foresees 2.4 percent growth this year and 2.1 percent for next year, but predicted growth will sink back below 2 percent in 2019.
The main trouble spot is Britain, whose economy will continue to be hobbled by uncertainty about its exit from the European Union. Growth "will continue to weaken" and be just above 1 percent in 2018 and 2019, it said.
Another big concern of the group: Employment is rising across most rich economies, but people's wages aren't.
"It's against intuition, it's against basic principles of economics, and normally it should have been otherwise," said Angel Gurria, the Organization for Economic Cooperation and Development's chief. "Clearly growth has to be made more inclusive."
"The ongoing digital revolution should be unlocking efficiencies and allowing workers to produce more," he said. But "nobody will be able to produce more if they don't have the skills to get the most out of the machine."
The report also warned of high corporate debt in China and spiking housing prices in some U.S. cities and rising household debt.
Asset prices have been buoyed by loose monetary policy and may turn as that stimulus is withdrawn, Mann said. While that doesn't necessarily indicate that the world will experience another financial crisis on the scale of that of 2008, it does mean that a market slump could drive a slowdown in the real economy, according to the group.
Information for this article was contributed by Bloomberg News.
Business on 11/29/2017