The Hindu : World economy on mend but many dangers

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Friday, Apr 25, 2003

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World economy on mend but many dangers — OECD

PARIS APRIL 24. The global economy should slowly emerge from recession, but anxieties over war, terrorism and disease still threaten growth and prosperity, the Organisation for Economic Cooperation and Development said on Thursday.

In its Economic Outlook, the OECD forecast lacklustre growth of 1.9 per cent this year across the 30 mainly rich member countries as a whole, much the same as in 2002, and it predicted a more solid recovery with expansion of 3 per cent in 2004.

"Worries about oil prices, anxiety in the face of war, fear of terrorism and epidemics, loss of confidence in international governance — the list of the so-called geopolitical and psychological factors is long," chief economist, Jean-Philippe Cotis, said in a preface to the twice-yearly report.

The situation had become a bit clearer since the U.S.-led war in Iraq and the safeguarding of oilfields there, and brisk reconstruction of the county could help, he said.

"This outlook still sees a progressive if unspectacular world recovery as the most likely scenario. While a relapse into recession cannot be totally ruled out, it remains a low-probability outcome," he added.

Many leading economic forecasters say that anything short of around 2 or 2.5 per cent growth at world level is tantamount to recession.

In essence, the OECD's report said much the same in terms of growth prospects as other recent reports from the International Monetary fund and the European Commission — sluggish growth in the months ahead and a likely pick-up towards the year's end.

Reuters

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