The outlook for the global economy leaves much to be desired as a tepid recovery in Japan, slowing activity in emerging markets and weak demand in Europe puts these economies on an uneven keel with the U.S., sources at the Group of 20 (G-20) meeting in Australia told CNBC on Saturday.
On Monday, the Organization for Economic Cooperation and Development (OECD) raised similar concerns, cutting its growth outlook for major developed economies.
The OECD reduced its 2014 and 2015 growth forecasts for the U.S. economy to 2.1 percent and 3.1 percent, respectively, from forecasts of 2.6 percent and 3.5 percent made in May. It cut euro zone growth forecasts for the same periods to 0.8 percent and 1.1 percent from 1.2 percent and 1.7 percent, respectively.
However, U.S. officials at the G-20 meeting said they are confident about the underlying dynamic in the U.S. economy, highlighting firm housing, steady consumption and solid job creation, as reflected by recent economic data. They expect the U.S. economy to expand 3 percent in 2014 and 2015.
Dim outlook in Europe
While participants agreed that Europe was underperforming, sources said there was a big divide on how to kick start the economy.
Euro zone inflation rose 0.3 percent on year in August, in line with expectations but marking the lowest reading in five years, data in early September showed. Meanwhile economic growth was flat in the second quarter, below expectations for a 0.1 percent on-quarter rise. Unemployment, another sore point, remained stubbornly high at 11.5 percent in July.