OECD Predicts That The Global Economy Will Avoid Recession

By: Dr. Mike Campbell

The Organisation for Economic Cooperation and Development (OECD) is based in Paris and has 33 full members. It was established in 1961 as the successor organisation to the Organisation for European Economic Development which was established after World War 2 to co-ordinate the reconstruction of Europe under the Marshall Plan. It is responsible for the collection and production of comparable statistics, economic and social data. The data is used to monitor trends; perform analyses and make forecasts of economic development and in other relevant areas.

The OECD has concluded that the global recovery is slowing down, but they conclude that a second period of global recession is (currently) unlikely. On the basis of their analysis, they have trimmed back the growth forecast for the G7 (the world’s largest (democratic) economies) from 1.75 to 1.5% and they note that the current economic climate is characterised by “great uncertainty”. They suggested that consumer spending may remain weak and that governmental measures designed to reduce public sector debt in many developed economies may constrain growth. On the positive side, the OECD reported that financial conditions were more stable and corporate profits were stronger.

OECD made a series of predictions for Q3 and Q4 growth which suggest that European output will decline towards the end of the year from the surprisingly strong performance seen in Q2 in which European growth outstripped figures for America. The USA is expected to post figures of 2 and 1.2%; Germany 0.6 and 0.7%; the UK 2.7 and 1.5; Japan 0.6 and 0.7%, Canada 2.2 and 2.3%, Italy -0.3 and 0.1% ad France 0.7 and 0.3% for Q3 and Q4 respectively (these nations make up the G7).