Recession Bottoming Out
June 25th, 2009 by 
THE ARTICLES SHOWN ARE FOR INFORMATION ONLY AND DO NOT CONSTITUTE ADVICE OR RECOMMENDATION
The Organisation for Economic Cooperation and Development says the world economy is near the bottom of the hardest recession since war time.
30 of the most industrialised nations which the OECD represent says those economies will contract by just over 4% this year and recovery is likely to be “weak and fragile,” The BBC reports.
The UK’s output is set to drop by 4.3% in 2009, worse than its previous forecast of a 3.7% fall, says the organisation.
It predicts zero growth in the UK economy in 2010 and says the UK budget deficit will reach 14% next year, worse than Government had previously estimated.
The OECD says the pace of the global downturn is now moderating after the sharp drop in the six months to March, yet it still predicts output will shrink by 2.2% this year.
However, the OECD has revised its overall economic forecast upwards, especially in 2010, for the first time in two years. It says the economies of Japan and the US are expected to decline less sharply than projected in its previous report.
With advanced economies will return to weak growth of 0.7% in 2010, compared with its previous forecast of a contraction of 0.1%,”it looks like the worst scenario has been avoided,” the OECD says.
“Even if the subsequent recovery may be slow, such an outcome is a major achievement of economic policy,” it adds.
However, it is more pessimistic about the UK and the eurozone’s prospects as “signs of impending recovery in the euro area are not yet clearly visible,” due to housing bubbles, damage to the financial sector and export set backs.
The OECD also warns rising public sector deficits in the UK will need to be reined in as recovery takes hold. It urges the Government to develop a “concrete and comprehensive plan” to ensure debt is on a deteriorating path.
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