OECD: Global Recession is Unlikely     09/09 08:18

   LONDON (AP) -- The global economic recovery could be slower than previously 
anticipated but a return to recession is unlikely, a leading international 
economic body said Thursday.

   In its latest economic assessment, the Paris-based Organization for Economic 
Cooperation and Development said the Group of Seven industrialized countries 
are set to grow by around 1.5 percent on an annualized basis in the second half 
of 2010.

   Though that's down from its previous prediction of 1.75 percent issued in 
May, the OECD reckons that the loss of momentum in the recovery is likely to 
prove "temporary," though uncertainty has increased.

   "It is unlikely that we are heading into another downturn," said the OECD's 
chief economist Pier Carlo Padoan.

   While consumer spending is set to remain weak, the OECD says a combination 
of robust corporate profits and low business investment suggest that capital 
spending is unlikely to weaken further.

   And because inventories are now close to desired levels, a renewed depletion 
of stocks is also unlikely, it added.

   Based on the most recent data, the OECD said U.S. economic growth is 
expected to rise by an annualized 2.0 percent in the third quarter but then 
moderate to 1.2 percent in the fourth quarter.

   In the second quarter, U.S. economic growth more than halved to a rate of 
1.6 percent, triggering concerns that the world's largest economy was heading 
for a so-called double-dip recession.

   In Japan, the OECD sees growth rising to 0.7 percent in the fourth quarter 
from 0.6 percent in the third. Though fairly muted, that's still an improvement 
on the 0.4 percent growth posted in the second quarter of the year.

   Meanwhile, the OECD said it expects the combined economy of the three 
largest countries in the euro area --- Germany, France and Italy --- to grow at 
a rate of 0.4 percent in the third quarter and 0.6 percent in the fourth 
quarter. Though growing, those rates are way lower than the 5.1 percent growth 
recorded in the second quarter when Germany, in particular, saw its exports 
bounce massively as global trade picked up.


(KA)