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14.11.2008 International

World Economic Activity To Fall


Economic activity is projected to fall by 0.9 per cent in the United States next year as Organisation for Economic Cooperation and Development (OECD) countries enter a protracted slowdown, according to latest projections.

That of Euro area would fall by 0.5 per cent with that of Japan going down by 0.1 per cent in Japan, a release from the World Bank Office in Accra said on Thursday.

Presenting OECD's gross domestic product (GDP), inflation and unemployment forecasts for these three major economies ahead of the G20 Summit on the financial crisis on 15 November, Jorgen Elmeskov, Director of Policy Studies in the OECD's Economics Department, said a high degree of uncertainty surrounded the outlook.

He said much would depend on the depth and duration of the financial crisis, the

main driver of the current recession, adding that the ongoing adjustment in housing markets still had a long way to go.

Mr Elmeskov said GDP for the OECD countries as a whole was expected to fall by 0.3 per cent year-on-year in 2009 before recovering slightly to grow by 1.5 per cent in 2010.

The average unemployment rate in the OECD area, estimated at 5.9 per cent this

year, is forecast to climb to 6.9 per cent next year and to reach 7.2 per cent in 2010.

Inflation should continue to ease as economic slack puts downward pressure on prices and if, as assumed, commodity prices maintained their recent lower levels.

Against this backdrop, additional macroeconomic stimulus was needed, Elmeskov said.