Global recovery is slowing, says OECD

GLOBAL RECOVERY looks to be slowing more than expected as growth weakens in rich economies, and stimulus should be extended or stepped up if the slowdown endures, the OECD said yesterday.

The Organisation for Economic Co-operation and Development forecast growth across the G7 group of major economies to average an annualised 1.4 per cent in the third quarter and 1.0 per cent in the fourth, down from 3.2 and 2.5 per cent in the first and second quarters respectively.

“We’re seeing a slowdown in the recovery which is more or less generalised,” said OECD chief economist Pier Carlo Padoan.

The OECD forecast annualised US growth rates of 2.0 and 1.2 per cent in the third and fourth quarters, after 1.6 per cent in the second quarter and 3.7 per cent in the first.

For Germany, France and Italy combined, the OECD forecast expansion to plunge to an annualised 0.4 and 0.6 per cent respectively in the third and fourth quarters of the year, from 5.1 per cent in the second quarter. Germany’s economy, which grew 2.2 per cent quarter-on-quarter in the second three months of 2010 – close to a 9 per cent annualised rate – would expand just 0.7 per cent in annualised terms in the third quarter.

For Britain, the OECD predicted 2.7 and 1.5 per cent annualised growth in the third and fourth quarters. – (Reuters)