OECD sees global recovery earlier than forecast

| September 3, 2009 | 0 Comments

The Organisation for Economic Co-operation and Development (OECD) said the global recession is ending faster than originally thought and expects the US and the euro zone to exit recession in the third quarter.

However, the news was not so positive for the UK with the organisation predicting that the economy will contract by 4.7% this year, revised upwards from its earlier prediction of a 4.3% contraction and far more negative than the 3.5% decline predicted by the UK Treasury.

The OECD said the UK is emerging from recession slower than other developed economies.

Meanwhile, major exporters such as Germany and Japan are expected to show larger falls than the UK - 4.8% and 5.6% respectively - due to the slump in global demand.

However, it is predicting that the world’s largest economy, the US, will grow at an annual rate of 1.6% in the third quarter, while the euro zone is expected to grow by 0.3%.

OECD chief economist, Jorgen Elmeskov, told Reuters: “Compared with expectations a few months ago, we now have a recovery which… may be coming a little earlier and it may be slightly stronger because financial conditions have improved more rapidly than we assumed a few months ago.”

The organisation’s latest predictions come the day before the meeting of finance ministers from the G20 group, to be held in London.

However, there was some positive news for the UK today after the latest Chartered Institute of Purchasing and Supply’s (CIPS) survey recorded a reading of 54.1.

The reading is the highest since September 2007 and is well above the crucial 50 mark - which represents growth.

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