Growth seen easing back slightly in US, Europe and Japan in first half of 2010

According to the OECD’s latest Interim Economic Assessment the pickup in activity seen in the G7 countries in the last quarter of 2009 is expected to ease back in the first half of this year.

The gross domestic product (GDP) seems to grow faster in the US than in Japan and the three largest countries in the European Union – Germany, France and Italy. But still it will remain generally fragile. Consumer and business demand is suffering especially from sluggish credit growth and difficult labour market conditions.

Based on the most recent data, the OECD short-term forecasting models show that US GDP is expected to rise by 2,4 % in the first quarter of this year and 2,3 % in the second. The combined GDP of the three largest countries in the euro area is projected to grow at 1.9% in the second quarter after 0.9% in the first three months of the year. In Japan, GDP growth is forecast at 2.3% in the second quarter of 2010 after 1.1% in the first. Fourth quarter 2009 GDP grew by 5.6% in the US; by 0.4% in the three largest countries of the euro area and by 3.8% in Japan.

Presenting the Interim Economic Assessment for G7 countries, OECD Chief Economist Pier Carlo Padoan said: “Although we are seeing some encouraging signs of stronger activity, the fragility of the recovery, a frail labour market and possible headwinds coming from financial markets underscore the need for caution in the removal of policy support.”

Mr Padoan said financial conditions have improved considerably. Despite their improved capital positions, banks, however, remain vulnerable to credit losses. He added that the unemployment rate has edged down in the United States and Japan and may well have peaked in the euro area.

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2 thoughts on “Growth seen easing back slightly in US, Europe and Japan in first half of 2010

  1. Despite the improvement in the financial markets overall situation is not stable. Still we hear the voices of a possible collapse of the economy. The good news is forecasts are showing a possible improvement in subsequent quarters. It seems to me that there is still a long time before normal people feel improvement in their financial situation, labour and credit market. The worst situation is in the richest EU countries. This is a confirmation that the developed countries have suffered the most by the greatest losses in the economy.

    Reply
  2. I agree with the preceding speaker.The situation is a consequence of economic crisis and it takes a long time to stabilize it. People doesn’t feel sure about their jobs, investors are very cautios about making new investments- this and more of that makes the stagnation at the market. However we can hear that economic situation is slowly getting better but as I said before it will take quite a lot time to “recover”.

    Reply

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