OECD forecasts recession

The Organisation for Economic Cooperation and Development (OECD) has launched a widespread appeal to policymakers to introduce more measures by pumping cash into their economies as they cut the forecast for 2009 global growth for the second time in a year.

The OECD released its latest figures in Paris yesterday and indicate that gross domestic product will fall by 0.3 percent in the 30 member countries it represents during 2009.

Of the three major economies, the US is forecast to shrink 0.9 percent next year, with the euro zone and Japan contracting by 0.5 and 0.1 percent respectively.

According to Jorgen Elmeskov, the OECD’s director of policy studies, it is fair to say that the whole of the OECD area economy is in recession and will not begin to recover until the end of 2009.

It is the first time since the Arab oil embargo back in the early 1970s that the US, Europe and Japan have fallen into recession.

One measure that can be used to alleviate the pressure of the current economic crisis is to reduce tax and to focus any policies at the households whose ability to obtain credit has been adversely affected, so as to increase domestic spending and build from within, according to Mr Elmeskov.

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