OECD says weak recovery is in sight
25/06/2009
This week the Organisation for Economic Co-operation and Development (OECD) said the economic slowdown is bottoming out following the deepest decline for more than 60 years.
However, they warned the recovery is likely to be weak and fragile and that we should expect to experience long-lasting economic and social damage.
For the first time in two years Economic Outlook economic growth is projected to move upwards. This upward prediction is mostly related to large emerging economies and the United States, while prospects for the euro area have worsened and Japan is mostly unchanged.
Angel Gurría, Secretary-General of the OECD commented:
“Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis, but the next few months will be equally testing.
There needs to be a clear and credible plan and timeline for phasing out the emergency measures as the recovery takes hold. It is critical to consider these exit strategies now in order to prevent new risks in the years ahead.”
Due to the expected weakness of the recovery, the OECD argues that governments need to implement announced stimulus measures promptly and fully. These tax breaks or spending measures should not be withdrawn at a pace which jeopardizes the recovery.
In addition they also stressed the urgent need for better regulation of financial markets to guard against future crises.
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