The Organisation for Economic Cooperation and Development has slashed its 2013 growth projections for the world’s advanced economies. In its economic outlook, the OECD said it expected growth of 1.4% next year in the group of 34 wealthy economies that make up the membership of the Paris-based organisation, down from 2.2% forecast in May, and called for several of its members to step up their policy response.
The Eurozone is facing 2 years of economic contraction, while the US risks a recession if lawmakers there fail to agree a deal to avoid a combination of tax hikes and budget cuts that will otherwise go into effect next year. “Over the recent past, signs of emergence from the crisis have more than once given way to a renewed slowdown or even a double-dip recession in some countries,” stated OECD chief economist Pier Carlo Padoan. “The risk of a major contraction cannot be ruled out.”