There is grim reading in the latest predictions from the Organisation for Economic Cooperation and Development.
OECD Secretary General Angel Gurria unveiled the Paris-based economic research agency’s annual survey of the euro zone. It says the region will not experience a strong economic recovery until the second half of next year at the earliest. Gurria told reporters: “The OECD economies, including the euro area, are now in recession and are likely to stay there for some time amidst the worst financial crisis since the Depression. The crisis has spread to emerging economies and global trade growth is slowing markedly, with further deceleration in prospect. That means we have not seen the worst.” For the euro zone economy as a whole the OECD is forecasting a 0.6 percent decline with Germany shrinking 0.8 percent and France 0.4 percent. Britain will likely see GDP fall by 1.1 percent and the US 0.9 percent with Japan fairing better at minus 0.1 percent. The OECD also called for the creation of a pan-European body to better supervise the financial sector. Britain and Germany have resisted that in the past but may be forced to reconsider as they have said concrete steps are needed to improve international cooperation. And the OECD said the European Central Bank should cut interest rates further at its policy setting meeting. It said the ECB has room to relax monetary policy as inflation pressures ease.