It is going to a bumpy road ahead for the world economy, but the Organisation for Economic Cooperation and Development has said the downturn is getting close to the bottom.
The Paris-based think-tank finds the economic outlook has improved for the first time in two years but warns high unemployment and ballooning budget deficits could knock a weak recovery off track: “The upward revision is fairly modest. And we do foresee a recovery that will be rather slow and fragile for some time. One reason for guarded optimism is the improvement in financial markets that we have seen in recent months.” The OECD’s quarterly economic outlook says Britain’s economy will shrink by 4.3 percent this year – its fastest pace of decline since World War Two – and stagnate in 2010. For the euro zone it talks about a 4.8 percent contraction this year and said evidence of a pickup is hard to pin down because of country-specific issues. The report said: “The eventual recovery may also be slow there, because rising unemployment makes consumers more reluctant to spend.”