Bleak OECD Growth Figures Presage Continued Gloom

19 October 2001

The world’s leading economies are suffering the worst year since 1982, with little improvement on the cards in 2002, according to leaked figures from the Organisation for Economic Co-operation and Development.

The OECD’s thirty member economies will see growth of just 1% in 2001 and a meagre 1.2% next year – far lower than the body’s forecasts in May of 2% growth this year and 2.8% in 2002.

Compiled at a recent OECD committee meeting of economists and government officials, the figures may be revised following talks with member governments, though are not expected to be significantly different when officially published on November 20.

Germany and Japan saw growth prospects slashed most. The former’s economy is expected to increase only 0.7% this year and 1% next, down from 2.2% and 2.4% in May; while Japan’s forecasts have been cut from 1% growth in 2001 and 2002 to contractions in both years.

The US is forecast to grow 1.1% this year before recovering slightly to 1.3%, though this is still well down on May’s 2002 forecast of over 3%. However, Britain, France and Italy, as well as the European Union as a whole, are expected to see even slower growth next year than in 2001. The bleakest outlook belongs to Turkey, forecast for a 6% contraction this year before a slight recovery in 2002.

Commented Marc Chandler of HSBC in New York: “Whether September 11 is the cause, or is just giving officials a reason to change their minds, people are generally pushing out the idea of recovery to the second half of next year.”

News source: Financial Times