OECD Cuts European GDP Forecasts

The Organisation for Economic Co-operation and Development reports that the recession in Europe has begun to become an irresistible drag on the economy throughout much of the balance of the developed world. And the problem could worsen. The OECD cut GDP forecasts for a number of nations for the rest of 2012. As part of its analysis:

The Assessment, presented in Paris by Chief Economist Pier Carlo Padoan, says that the G7 economies are expected to grow at an annualised rate of just 0.3 percent in the third quarter of 2012 and 1.1 percent in the fourth.

That puts the current expansion dangerously close to a recession throughout the G7. The OECD's assessment of the eurozone's three largest countries - Germany, France and Italy - is particularly depressing. They are expected to have economic contraction of 1% in the third quarter and of 0.7% in the final quarter of 2012. The only G7 nation that is expected to do well at all, at least relatively, is the United States, where third-quarter growth is expected to be 2% on an annualized basis and 2.4% in the final quarter of the year.

Douglas A. McIntyre

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