OECD warns of Eurozone risk to world economy
THE EUROZONE crisis remains the single biggest threat to the global economic recovery, the Organisation for Economic Co-operation and Development (OECD) said yesterday.
“The crisis in the Eurozone remains the single biggest downside risk facing the global outlook,” said OECD economist Pier Carlo Padoan.
“Adjustments in the euro area are now taking place in an environment of slow or negative growth and deleveraging, prompting risks of a vicious circle involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth,” the report added.
The OECD urged national governments to implement structural reforms as “the short-run remedy to spur growth and boost confidence”.
The Paris-based group expects growth across its member states to slow to 1.6 per cent this year, down from 1.8 per cent in 2011.
In the Eurozone alone, the economy is expected to contract by 0.1 per cent, the OECD said.
And next year the unemployment rate in the euro area will reach an eye-watering 11.1 per cent, the report predicts.