Weak recovery in sight but damage from crisis likely to be long-lasting, says OECD
The Organisation for Economic Cooperation and Development says the slowdown in OECD economies is reaching the bottom following the deepest decline for more than 60 years.The latest edition of the Economic Outlook is the first in two years to see previous projections for economic growth revised upwards - most clearly for the large emerging economies and the United States - rather than downwards. But the prospects for the euro area this year have worsened and Japan's have changed little since the OECD's previous projections were published in March.
Signs of recovery are not yet clearly visible in the euro area. GDP is expected to contract 4.8% this year and to show 0% growth in 2010. The previous projections were for a 4.1% fall in 2009 and a 0.3% fall in 2010. Each country has its own specific combination of weaknesses such as bursting housing bubbles, declining exports and damaged financial sectors. The eventual recovery is likely to be slow as rising unemployment will hit consumer spending.
“Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis,” said Angel Gurría, Secretary-General of the OECD. “But the next few months will be equally testing. There needs to be a clear and credible plan and timeline for phasing out the emergency measures as the recovery takes hold. It is critical to consider these exit strategies now in order to prevent new risks in the years ahead.”
Email this article to a friend
You need to be logged in to use this feature.
Please log in here