OECD falls into contraction on Eurozone woe

Ben Southwood
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FALLING output across the Eurozone pulled the Organisation for Economic Co-operation and Development (OECD) group of major economies into decline in the fourth quarter of 2012, the organisation said yesterday.

The total output from OECD countries fell 0.2 per cent in the final three months of last year, dragged down by a 0.6 per cent contraction in the Eurozone economy.

But other major economies were little help: the UK shrank 0.3 per cent, Japan’s GDP crept down 0.1 per cent, US GDP was almost completely flat and Canada’s figures were not yet released.

But this gloomy quarterly picture was not mirrored exactly in the US No change annual figures. OECD output rose 0.7 per cent between the fourth quarter of 2011 and the same period last year, the organisation’s numbers revealed.

But for a 2.7 per cent plunge in Italian GDP, the OECD would have done better, as US output increased 1.5 per cent, Japan edged up 0.1 per cent, and Germany’s economy grew 0.4 per cent. UK output was almost completely flat over the year, with a strong third quarter outweighed by poor performance in the other nine months of the year.

These yearly figures, which give a much stronger impression of the pace of expansion in the US, are in line with widely-held hopes that the world’s biggest economy is finally on the path to solid growth, potentially bringing other countries with it on its way up.