Nov 21, 2009
The Paris-based economic adviser Organization of Economic Cooperation and Development (OECD) confirmed Thursday the economic recovery has now spread to OECD area at large and forecasted a whole growth of 1.9 percent in 2010.
However, the report admitted that the OECD economy remains dragging in depression for 2009 as households and businesses need time to revive their confidence and repair their finances.
According to the report, the Untied States will bear a 2.5 percent contraction, better than the 4.0 percent decline for the euro area and 5.3 percent for Japan. The OECD will embrace a decline of 3.5 percent at large, and world trade will also decline12.5 percent for the year.
The OECD outlook report also forecasts growth in the coming years, saying that the United States will see 2.5 percent growth in gross domestic products (GDP) in 2010 and a further 2.8 percent in 2011, while the economy of the euro area and Japan will respectively increase 0.9 percent and 1.8 percent in 2010, and 1.7percent and 2.0 percent in 2011. Speaking generally, the report said, the world trade growth will stand at 6.0 percent for 2010.
The report attributes the long awaited modest growth across the OECD area to the held-back effect of stimulus policies implemented by different governments.
These stimulus packages also brought side effects. Jorgen Elmeskov, acting chief economist of the OECD, warned that government budgets had suffered badly from the global financial crisis. "The gross debt of most OECD countries could be larger than their GDP by 2011."
To strengthen the base of sustainable development, "removing stimulus measures is imperative but such action has to be carried out gradually to avoid undermining the recovery," OECD Secretary-General Angel Gurria said.