Wednesday, 26 November 2008
The Paris-based Organization for Economic Cooperation and Development predicts the number of unemployed across its 30 member states could rise by 8 million people over the next two years. The report predicts slowed growth well into next year.
Overall, the situation is grim, said OECD's chief economist Klaus Schmidt-Hebbel, including for the United States.
"U.S. GDP is projected to continue falling until and through the first half of 2009 and this is due obviously to number one the housing downturn, number two the severe financial crisis - which is probably the most severe in the United States itself, and number three and very importantly the massive losses in household wealth which come from the declining stock market prices and house price slumps," said Schmidt-Hebbel.
The OECD's report comes as a number of countries, including several in the European Union, have already reported being in recession. The OECD predicted the economies of all major industrialized countries will shrink next year. The US economy is expected to contract by 0.9 percent in 2009, while that of the 15-member eurozone is predicted to decline 0.6 percent. Japan's GDP growth is expected to be down 0.1 percent and the OECD area overall to shrink by 0.4 percent.
The report predicted Britain, Hungary, Iceland, Ireland, Luxembourg Spain and Turkey, will be hardest hit by the economic downturn. But emerging countries like China, also will experience slower growth in 2009, the report predicted.
A number of countries have already launched stimulus packages to turn around their economies, including one unveiled by Britain on Monday. President-elect Barack Obama is reported to be planning another one for the U.S. economy when he takes office in January. The OECD forecast the U.S. economy would turn around in 2010, growing by 1.6 percent.
By Lisa Bryant
Paris
25 November 2008
