The eurozone debt crisis is threatening the global economic recovery, the OECD says
Decisive policy action is needed to ensure the world is not “plunged back into recession”, according to the OECD.
The Organisation for Economic Co-operation and Development, which represents the world’s richest nations, also lowered its growth forecasts.
The group’s economies will grow by 1.4% next year, rather than the 2.2% forecast in May, it said.
The eurozone recession will also be deeper and more prolonged than previously thought, it added.
The group highlighted the so-called US fiscal cliff and the eurozone debt crisis as the biggest risks to the global economy.
The fiscal cliff refers to spending cuts and tax rises, designed to reduce the US government’s debt levels, that are due to kick in in the new year.
“The world economy is far from being out of the woods,” said the OECD’s Secretary General Angel Gurria.
“The US fiscal cliff, if it materialises, could tip an already weak economy into recession, while failure to solve the euro area debt crisis could lead to a major financial shock and global downturn.”
The OECD cut its growth forecast across its 34 members for this year and next. It also revised down sharply its estimate for the eurozone economy, which it now believes will contract by 0.1% in 2013, rather than grow by 0.9% as forecast in May.
Global recovery 'under threat' http://news.bbcimg.co.uk/media/images/64407000/jpg/_64407108_64407107.jpg
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