PARIS - Agence France-Presse
The OECD slashed its growth forecast for the world's industrialised powers yesterday, warning of several lackluster quarters ahead despite signs that financial market upheavals may have "passed their peak."
The Organization for Economic Growth and Development in a twice-yearly survey said its 30 member economies were confronting "three adverse shocks" - continued financial market uncertainty, a housing downturn and soaring food and energy prices.
It predicted that momentum in the industrialized world would slow to 1.8 percent this year, from 2.7 percent in 2007, and 1.7 percent in 2009.
The OECD in its last report in December foresaw growth of 2.3 percent this year and 2.4 percent in 2009.
Inflation, driven by climbing commodity prices, likewise looms over the OECD area and is expected to come to 3.0 percent this year after 2.2 percent in 2007.
"Several quarters of weak growth lie ahead for most OECD economies," Jurgen Elmeskov, acting head of the OECD economics unit, wrote in an editorial entitled "After The Storm" that introduced the report.
"The odds have improved that financial market dislocation has passed its peak, but this is far from a foregone conclusion," he said. "And even if true, the effects on growth are likely to linger."