OECD sees economic recovery by 2010

The Western world's economy is heading for the worst recession since the oil crisis of 1970s, according to OECD's latest forecasts. The leading economies are definitely in a state of recession. The situation was already bad in summer with high raw material prices, a correction of the property market and financial turbulence. When the Lehman Brothers declared bankruptcy, the real financial crisis broke out. It is the reason behind the prevailing recession, said Jörgen Elmeskov who is responsible for the report " Economic Outlook" released Thursday.

According to "Economic Outlook" the growth forecast for next year remains down. In June, OECD predicted that USA's economy will grow by 1.1 percent in 2009, and the Euro area by 1.4 percent. The growth figures as they stand now are on minus with USA shrinking close to 1 percent and the Euro area by half percent.

Earlier in the week, OECD presented a summary of important recession indicators for the world's leading economies, which are all on a downturn direction. OECD economist Ronny Nilsson said: " Now the recession in certain countries is so weak that one must go back 30 years in time to find the same level. There is no upward turn in sight." Unemployment among OECD member- states is around 6.9 percent next year and 7.2 percent in 2010. The Euro area will be worst affected with 7.4 percent this year and 8.6 percent next year.

However prices will decline and inflation could be lower than feared. The OECD economists urged more measures needed to stabilise the financial markets, and that such measures should be done through international cooperation.# (Translated and edited from Dagens Nyheter, Nov. 14, 2008)