WASHINGTON — The chief economist of the Organization for Economic Cooperation and Development says sluggish global growth threatens to keep governments around the world from being able to pay pensions and bondholders.
The OECD, representing mostly advanced economies, has lowered its forecast for worldwide economic growth to 3 percent this year from the 3.3 percent it estimated in November. When growth is weak, governments collect less revenue and struggle to pay pensioners and meet all their debt payments.
Catherine Mann, the group's chief economist, tells reporters, "These kinds of numbers mean we are not going to make good on these commitments."
She says that to jump-start growth, countries need continued stimulus from central banks, government spending and tax policies that encourage expansion and economic reforms.