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Growth to slow in 7 largest economies

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by Kay Mitchell

According to the Organisation for Economic Cooperation and Development (OECD), growth in the seven largest economies are set to slow further.

The Paris-based organisation said its research for June points towards a continued weakening outlook for all the major seven economies.

The warning comes as the fallout from the credit crisis has affected economies worldwide, as well as rising food and fuel costs and record oil prices which continue to have an impact.

The comments from the OECD are based on its composite index of leading indicators (CLI), which forecast economic conditions in six months time. Its indicator for the OECD area dropped to 96.8 in June, compared with 97.4 in May.

In addition, a similar indicator for the Group of Seven leading industrial nations also dropped to 97.0 in June, compared with 97.4 in May.

The group said that economic growth in non-OECD member economies including China and Brazil was still strong and will grow while a downturn will be experienced in India and Russia.

The eurozone indicator fell by 0.8 points in June for a 12-month fall of 5.2 points, while the figure for the US economy fell by 0.2 points and was 5.4 points down over 12 months. For Japan, the June figure was the same but did show a fall of 4.1 points over 12 months.

The figures from the OECD follow those from the International Monetary Fund (IMF) who recently revised its forecast for UK economic growth over the next two years.

The credit crunch, falling house prices and rising unemployment led the IMF to announce that UK growth will be just 1.4% in 2008 and 1.1% in 2009, down from the 1.8% for 2008 and 1.7% for 2009 that it previously forecasted.

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News posted: August 10, 2008

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