At the 2006 OECD Ministerial Council Meeting, ministers said they expected the buoyant pace of world growth witnessed over the past few years to be sustained in the near future.

“Against the backdrop of continuing rapid growth in the emerging economies, notably in Asia, the expansion in the OECD area would proceed apace, with activity broadly at potential in the United States and Japan and catching up gradually in Europe,” they said. They see unemployment staying low in North America and Japan, and declining in a number of European countries, albeit slowly.

The ministers considered that inflation was likely to remain under control, despite shrinking spare capacity and higher commodity prices, because heightened international competition would help contain prices.
While they noted that rising energy prices have not thrown the global expansion off course, they expressed concern about the likely impact of any further increases. They also recognised the importance of enhancing energy security through improvement of energy efficiency and further investment across the supply chain.

The ministers noted that benign financial conditions had supported demand so far but that this might not last: interest rates were now rising, in a context where valuations in some asset markets seemed stretched.

The third risk the ministers highlighted related to widening current account gaps, partly reflecting domestic imbalances. Ministers underlined that timely policy action- both macroeconomic and structural – was required to reverse this trend and to facilitate a smooth unwinding of the imbalances.

As for the longer-term challenges facing the OECD economies, they identified the most important as being the large and persistent divergences in growth rates of GDP per capita among countries, which signaled a failure on the part of some OECD countries to converge or keep up with best policy practice.

They noted that better structural policies in a range of areas – notably labour utilisation, productivity, innovation and financial markets – are an essential part of the solution.

Also, Pascal Lamy, director-general of the WTO, reported on the status of WTO negotiations on the Doha Development Agenda. Ministers emphasised that successful conclusion of the negotiations would provide a major boost for the world economy, and for developing countries in particular, and that this would enhance the credibility of the multilateral system.

The ministers also agreed that it is essential to expand the OECD’s global reach and policy impact through an enlarged membership and enhanced engagement with important non-OECD economies, they welcomed the Council decision to establish by July a mechanism to identify countries for potential accession and countries for enhanced engagement with the OECD and invited the Secretary-General to report on progress at the next meeting.

Ministers invited the Secretary-General to develop new ideas and be proactive in approaching non-member economies with a view to making the OECD a permanent hub for dialogue on global economic issues for member and non-Member economies and to report on progress in this area at the next ministerial meeting in 2007.