GLOBAL - OECD countries have been warned of the growing importance of developments in non-OECD economies, as they attempt to ride out the effects of a "near-perfect storm".
He said in his report OECD economies had been hit by strong gales over the recent past and it would take time and well-judged policies to get back on course.
He added: "It is a tribute to the effects of past structural reform and well-honed macro-policy frameworks that the effects of this near-perfect storm have not been worse. This underlines the need to persevere with such policies."
Pointing to areas of concern, Elmsekov said OECD countries needed to consider the influences of higher energy and credit costs on the supply side of OECD economies; the possibility of upward drift in inflation expectations; and the uncertainty as to the effects of financial market developments on growth and inflation.
He said: "Globalisation was an important driver of the economic cycle on the way up as non-OECD economies exported both cheap manufactured products and surplus saving, helping to keep OECD interest rates low and thereby boosting asset demand and prices.
"Currently, robust non-OECD growth is an important factor behind high commodity prices. And, going forward, continued rapid import growth in non-OECD countries will help to cushion activity in the OECD area. At the same time, buoyant non-OECD demand is leading to inflationary pressure in these countries and sustains tensions in commodity markets.
Elmsekov added: "Macroeconomic policy setting, and in particular monetary policy, in OECD countries needs to take into account that non-OECD countries are likely to be an important source of demand at the same time as they are likely to be a less important source of disinflation than previously."
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