labels: economy - general
EU on course to replace US economy as global growth engine, says OECDnews
24 May 2007

Mumbai: The 13-nation European Union is on course to be the lead economy supporting global growth and fill the gap left by the United States, the OECD has said, lowering its US forecasts and raising its outlook for Europe.

The Paris-based Organisation for Economic Cooperation and Development sees economic growth in the US, beset by housing and investment woes, is slipping in the third quarter.

It expects the US economy to expand 2.5 per cent in the second quarter and 2.3 per cent in the third, less than the 2.7 per cent and the 2.8 per cent it had expected in November.

Led by Germany, the pace of growth in 13 nations sharing the euro will reach 2.6 per cent in the second quarter and 2.5 per cent in the third, compared with the 2.2 per cent and 2.3 per cent previously forecast.

"We are still counting on a scenario of re-balancing," OECD chief economist Jean-Philippe Cotis wrote in a preface to the OECD''s twice-yearly outlook.

"Our central forecast is very favourable, with a soft landing in the US and a strong and sustained rebound in Europe, a solid trajectory in Japan and a ''bubbly'' conjecture in China and India."

For the year as a whole, OECD sees the euro-zone economy growing 2.7 per cent, the US at 2.1 per cent, and Japan at 2.4 per cent. In 2008, it predicted, the US will recover, outpacing Europe at 2.5 per cent compared with 2.3 per cent.


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EU on course to replace US economy as global growth engine, says OECD