OECD sees growth in 2012 but lots of risks

Kathimerini English - - Business & Finance -

Greece’s econ­omy will emerge from a three-year re­ces­sion and re­turn to growth next year in a re­cov­ery that re­mains “fraught with risks,” the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD) said yes­ter­day.

The Greek econ­omy will ex­pand 0.6 per­cent next year, af­ter con­tract­ing 2.9 per­cent this year, the OECD said in its an­nual eco­nomic out­look pub­lished in Paris.

Greece’s deficit, the sec­ond largest in the euro re­gion last year, will de­cline to 7.5 per­cent of gross do­mes­tic prod­uct this year, while the un­em­ploy­ment rate will rise to 16 per­cent in 2011, from 12.5 per­cent last year.

“The path to sus­tain­able pub­lic fi­nances and re­newed eco­nomic growth is clearly fraught with risks,” the re­port said.

“Many things could go wrong in the in­ter­na­tional sphere, in­clud­ing a fur­ther loss of con­fi­dence or a marked weak­en­ing in ex­port mar­kets. The gov­ern­ment can do lit­tle to in­flu­ence these fac­tors. It can, how­ever, con­tinue to im­ple­ment the pro­gram of fis­cal ad­just­ment and struc­tural re­form. In­deed, a slow­down in these ar­eas would dam­age cred­i­bil­ity, thereby ag­gra­vat­ing the al­ready dif­fi­cult sit­u­a­tion.”

The OECD is more op­ti­mistic than the Euro­pean Com­mis­sion, which pre­dicted in its spring out­look that the 230-bil­lion-euro Greek econ­omy will con­tract by an an­nual pace of 3.5 per­cent this year.

Look­ing else­where, the Paris­based or­ga­ni­za­tion said that prospects for eco­nomic growth in the United States and the eu­ro­zone have im­proved and are pre­dicted to hit 2.6 per­cent and 2 per­cent this year re­spec­tively. Over­all fore­casts for real GDP growth in the OECD’s 34 mem­ber states, com­pris­ing most of the world’s ma­jor economies, re­mained steady at 2.3 per­cent in 2011.

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