, pub-6370463716499017, DIRECT, f08c47fec0942fa0 AlfaBloggers Best Bloggers Team Of Asia : Global Recession Warning from OECD

Thursday 29 November 2012

Global Recession Warning from OECD

Protesters march through Dublin ahead of Ireland's sixth straight austerity budget. Photo / AP
The global economy could slide back into recession if its major problems like US budget standoffs and Europe's lack of jobs are left to fester, a leading international economic body said yesterday.

In its half-yearly update, the Organisation for Economic Cooperation and Development warned that the recovery will be "hesitant and uneven" over the coming two years and that a new major contraction cannot be ruled out.

"The world economy is far from being out of the woods," OECD Secretary-General Angel Gurra said. "Governments must act decisively, using all the tools at their disposal to turn confidence around and boost growth and jobs in the United States, Europe and elsewhere."

Gurria's downbeat assessment came as the OECD published a glum set of predictions. Though the world economy is expected to grow by 3.4 per cent next year, up from 2.9 per cent this, the numbers mask big divergences around the world.

Though countries like China, Brazil and India are expected to see growth pick up, the more established economies remain stuck in a rut.

In particular, the OECD was gloomier about Europe than in its last forecast six months ago, saying "the greatest threats to the world economy" lie in the 17-country eurozone, which continues to grapple with a debt crisis after three years.

A deep global recession is also possible, it said, if the European crisis doesn't stabilise.

The OECD is now predicting a 0.4 per cent contraction this year for the eurozone, worse than May's 0.1 per cent forecast.

For next year, it's forecasting a further 0.1 per cent fall, in contrast to the previous prediction of 0.9 per cent growth.

It also downgraded its forecasts for the US economy and warned that it could be worse if the White House doesn't clinch a deal with lawmakers on the budget. Assuming a deal is thrashed out, the OECD has pencilled in growth of 2 per cent for the US next year, down from a forecast of 2.6 per cent in May.

The OECD cautioned that growth outside the OECD, which comprises 34 developed economies mostly in North America and Europe, would be slightly faster but crimped by Europe's troubles.

The OECD also warned the US and Europe against cutting spending too quickly, saying that could further hurt growth prospects. It suggested countries such as Germany and China could provide fiscal stimulus to boost growth.

Padoan expressed concern about the so-called fiscal cliff in the US, automatic tax increases and steep spending cuts that take effect in January unless President Barack Obama and Congress reach a budget agreement.

"If the fiscal cliff is not avoided, a large negative shock could bring the US and the global economy into recession," Padoan said.

The report argues for "measured" spending cuts and tax increases.

The report warned that unemployment would continue to rise in the eurozone from 11.1 per cent this year to 12 per cent in 2014, but that the rate in the US would gradually decline to 7.5 per cent in 2014.

Slovenia's Economy Is in Recession as Consumption Slumps
Slovenia's economy slid into its second recession in three years as exports to Europe eased and consumption slumped following a government austerity program, a survey of economists showed. Gross domestic product contracted 2.3 percent from a year ...
See all stories on this topic »
'Conscientious consumption' survives recession
Corporate giving fell in 2009 in the wake of the Great Recession, according to an annual survey of 144 companies by the Committee Encouraging Corporate Philanthropy (CECP) a non-profit that helps companies with their giving. But in its most recent ...
See all stories on this topic »
Italy Business Confidence Rises After Economic Recession Eased
Italy entered the recession in the fourth quarter of 2011 as the global slowdown aggravated the effects of waning productivity and tax increases and public spending cuts passed by Prime Minister Mario Monti's government to contain the euro-region's ...
See all stories on this topic »
UPDATE 1-Euro zone economic mood cheers up a little in November
BRUSSELS, Nov 29 (Reuters) - Economic morale in the euro zone improved for the first time in almost a year in November, but industry's reluctance to invest next year bodes poorly for a quick recovery from recession. Sentiment towards the bloc's economy ...
See all stories on this topic »
Global recession warning
New Zealand Herald
The global economy could slide back into recession if its major problems like US budget standoffs and Europe's lack of jobs are left to fester, a leading international economic body said yesterday. In its half-yearly update, the Organisation for ...
See all stories on this topic »
The Coming Recession
Motley Fool
With the U.S. Congress still struggling to resolve what has come to be known as the "fiscal cliff" before the deadline passes and we all plunge over the precipice, there has been a lot of talk and official prediction related to a coming U.S. recession ...
See all stories on this topic »
Green Energy: The Answer to the Recession That Could Be Implemented ...
What they have failed to notice is that this is not a recession. It's a brand new economy and this economy will center on energy. The nation that dominates the harvesting of cleaner, cheaper energy will dominate the globe in the 21st century. Every...
See all stories on this topic »

ACHUTHAN: I Have One More Month On My Recession Call
Business Insider
ECRI's Lakshman Achuthan is on Bloomberg Surveillance with Tom Keene, vigorously defending his recession call, which many have called dead wrong. In case you're catching up, back in September 2011 Achuthan predicted the U.S. would go into ...
See all stories on this topic »

Business Insider
OECD says chance of quick Spain recovery 'remote'
Business Recorder (blog)
"The economy is undergoing a prolonged recession," the Organisation for Economic Cooperation and Development said in a report, citing the 2008 global financial crisis and the bust of a Spanish housing boom. "The prospect of an immediate recovery ...
See all stories on this topic »

No comments:

Post a Comment

Note: only a member of this blog may post a comment.