The OECD has announced a cut in its global growth forecast for 2012, saying that the Eurozone has entered what it termed a “mild recession” and warning that the same could happen in the US.
The new forecast stands at 3.4% growth for 2012, down from 4.6%, while the OECD predicts that economic growth in 2011 will stand at 3.8% rather than the previous prediction of 4.2%.
More drastic was the change to the OECD’s forecast for the Eurozone; from 2% the forecast was slashed 90% to 0.2%.
However, the organization foresaw a slight rise in US growth – revising its previous estimate of 1.7% in 2012 upward to 2% - but only if the US took steps to mitigate fiscal tightening.
Turning to China, the OECD projections said that the country’s current rate of economic growth, 9.3%, would slow to 8.5% in 2012.
According to the OECD, the ongoing debt crisis in Europe remains the main risk to economies all over the world.