The Organization for Economic Co-operation and Development (OECD) in its latest Interim Economic Assessment says the global economy is slowing because key European countries are entering a recession that is now having worldwide impacts.
According to the assessment, the G7 economies are expected to grow at an annualized rate of just 0.3% in the third quarter of 2012 and at a rate of 1.1% in the fourth quarter. The organization warns that “the continuing euro area crisis is dampening global confidence, weakening trade and employment and slowing economic growth for OECD and non-OECD countries alike.”
The OECD projects that the euro area’s three largest economies – Germany, France and Italy – will shrink at an annualized rate of 1% on average during the third quarter and at 0.7% in the fourth. The weak growth outlook is expected to push unemployment beyond today’s already high levels.
OECD continues, “While the United States is affected by the euro area slowdown, growth is nonetheless projected at an annualized rate of 2% in the third quarter and a 2.4% pace in the fourth. Canada is set to grow at a rate of 1.3% during the third quarter and 1.9% during the fourth. The Japanese economy is projected to contract at an anualized rate of 2.3% during the third quarter and hover around a zero growth rate in the fourth.”
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