Market Sensitive News
11/19/2009 4:41 PM
ET
(RTTNews) -
The Organization for Economic Co-operation and Development (OECD) said Thursday that an economic recovery was underway across the world, but warned that the pace of growth and recovery was modest and not fast enough to put brakes on the rate of rising global unemployment.
"The good news is that the recovery -- albeit a weak one -- is underway," said OECD Secretary-General Angel Gurria, warning that "with millions of jobs lost and public budgets under strain, governments will have to tread carefully in the months ahead."
"The great challenge ... is to move from a policy-based recovery to self-sustained growth and there are a number of risks that could complicate that transition," he added.
OECD said in its latest Economic Outlook that the global economic recovery is being headed by emerging Asian economies like China and India, but raised its growth forecast for its member countries from 0.7% to 1.9% for next year.
"The upturn in the major non-OECD countries, especially in Asia and particularly in China, is now a well established source of strength for the more feeble OECD recovery," the report said. The report indicated that recovery would be uneven, "with growth likely to fluctuate around a modest underlying trend for some time to come."
The outlook predicted that the U.S. economy would grow by 2.5% next year and 2.8% in 2011, after shrinking by 2.5% this year. The jobless rate in the United States is expected to peak in the first half of 2010, but warned that the ongoing high unemployment rate in Europe would remain in place well into 2011.
On mounting debt pressures, the report said "stopping the the rot is clearly necessary and will call for fiscal (budget) consolidation that is substantial in most cases and drastic in some." It, however, added that reform of national budgets "should not proceed at a pace that undermines the recovery."
Regarding the so called 'Bric' countries, the report predicted growth rates of 10% for China, 7% for India and 5% each for Russia and Brazil for the next year. But the four nations are not members of the Paris-based OECD, which coordinates economic policy among its 30 member nations that include leading industrialized economies like the United States, Britain and France.
by RTT Staff Writer
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