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The Paris-based Organisation for Economic Cooperation and
Development had said in June the global economy was on course
this year for its fastest growth in six years, but a resurgence
in inflation has yet to materialize.
"You're getting to a point where you are starting to see
localized labor shortages and a natural reaction, finally,"
Gurria told Reuters in Bangkok.
"It’s good but normally you would have expected that you would
have gotten positive signs of wage increases a long time before
you are almost at full employment."
Gurria said that European and Japanese central banks in
particular would need to keep monetary policy "on the lax side"
for some time to encourage higher growth at a time of
uncertainty.
"Inflation is the manifestation, it’s not the problem, it’s
growth that is the problem," he said, pointing to weak demand,
consumption and investment because people lacked confidence
about the future.
The possibility of a shutdown in the U.S. government after a
threat by President Donald Trump over funding for a border wall
with Mexico could bring added uncertainty but would ultimately
be resolved, he said.
"In the meantime there is stress and ideally you’d choose not to
have it," said Gurria, a Mexican economist.
He said it was too early to judge the impact of Trump's "America
First" trade policy amid fears of protectionism as the United
States starts renegotiating the North American Free Trade
Agreement and promises to tackle its big trade deficits.
"There’s a lot more in the speeches than there has been in the
policy decisions simply because the processes are only just
beginning. It’s a little early," said Gurria, in Thailand for
the setting up of an OECD programme.
(Reporting by Matthew Tostevin; Editing by Nick Macfie)
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