Economic activity is expected to plummet by an average 4.3 percent in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures for the first time since the early 1990s, according to the OECD’s Economic Outlook Interim Report published on 31 March.
International trade is forecast to fall by more than 13 percent in 2009 and world economic activity to shrink by 2.7 percent. The global recession will worsen this year before a policy-induced recovery gradually builds momentum through 2010. Especially export-oriented economies such as Japan will be suffering from weak economy. In Japan, economic output is projected to fall by 6.6 percent this year as shrinking export markets more than offset policies to encourage domestic spending. Deflation will return as spare capacity puts downward pressure on prices.
The Interim Outlook adds that the risks of an even gloomier scenario outweigh the possibility of a quicker recovery. The most important risk is that the weakening real economy will further undermine the health of financial institutions, which in turn deepens the slump in economic activity. The report recommends that those countries that have scope for further action should consider boosting the stimulus.
The Interim Economic Outlook was published ahead of the G20 summit on the economic and financial crisis on 2 April. Next periodic Economic Outlook containing detailed forecasts and analysis for all OECD countries and other major economies will be released in late June.
Further information: Mr. Lauri Taro, Counsellor, tel. +33 1 45 24 71 71
or on OECD's website: GDP to plummet 4.3 percent across OECD countries in 2009 as unemployment climbs sharply
