OECD predicts early recovery from recession

The Organisation for Economic Cooperation and Development (OECD), Paris-based group of the world's richest countries, said recovery from the global recession is likely to arrive earlier than expected, but it is too soon to trigger exit strategies.

According to OECD's Interim Assessment report published yesterday in Paris, economic growth across the Group of Seven countries will fall by 3.7 per cent this year, a less brutal contraction than the 4.1 per cent drop projected in June 2009.

The latest GDP forecasts for this year provides slightly improved outlooks for Japan and the Euro area, and an unchanged overall projection for the US. However, it painted Britain as the last major economy to exit the recession.

The group advised governments to continue to stimulate their economies as rising unemployment and weak housing markets continue to dampen private demand.

The current exceptionally low interest rates should remain in force for the time being, the assessment adds.

"It is important not to get carried away. Green shoots seem likely to growth further in the near-term but will still need careful nurturing by policy if they are to become strong, self-sustaining plants," said Jorgen Elmeskov, acting head of the OECD's economics department during a press briefing.