Asian boom to aid global economy: OECD report


Paris : The latest OECD economic outlook report released in Paris Thursday forecasts a sustained recovery in Europe, a "soft landing" in the US and a solid world growth trajectory fired by the Asian boom.

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In 2007 and 2008, the economy of the 31 OECD countries would witness a GDP growth of 2.7 percent, according to the OECD forecast.

Germany would continue to experience strong growth, with GDP set to expand by 2.9 percent in 2007, and there would be "soft landing" in the US after several boom years.

Growth in the US economy was slowing down from 3.3 percent in 2006 to 2.1 percent in 2007. Predicted growth for 2008 was 2.5 percent.

Thanks to recovery in Germany and Italy, the Euro zone would experience a growth rate of 2.7 percent in 2007. In 2008, the predicted growth of 2.3 percent was above potential growth of 2 percent.

The German economy's expansion rate would be 2.2 percent in 2008, 0.6 percentage points above potential growth rate. The trend was for the German economy to be increasingly sustained by investments and by consumption – a welcome development.

Growth would remain solid in Japan for 2007, up to 2.4 percent compared to 2.2 percent in 2006. However, there would be a slight downturn in 2008 with a predicted growth rate of 2.1 percent.

Growth in China and India would be buoyant, the report predicted. However, it also warned of risks posed by imbalances in current accounts and possibly in financial and housing markets.

Unemployment in the US would remain at the 2006 rate of 4.6 percent in 2007 and would rise to 4.8 percent in 2008. The German unemployment rate for 2007 would be 6.9 percent, down from 8.1 percent in 2006.

The predicted German unemployment rate was 6.3 percent for 2008. Japanese unemployment for 2007 fell to 3.8 percent from 4.1 percent in 2006.

The predicted unemployment rate for Japan in 2008 would be 3.6 percent, according to the OECD report. The overall rate for the OECD countries in 2006 was 5.9 percent, and was projected to fall further, to 5.6 percent this year and to 5.5 per cent in 2008.