Growth in OECD region slows down

Growth of the OECD region, which accounts for over 60 per cent of the global economy, declined to 0.4 per cent in the last three months of 2010 as compared to 0.6 per cent in the September quarter, 2010, raising concerns about the pace of global economic recovery

The Organisation for Economic Cooperation and Development (OECD) comprises 34 countries, including the US, the UK, Germany and France.

After registering good expansion in the first half of 2010, most of the European economies are seeing slow growth and rising unemployment.

“Gross domestic product (GDP) in the OECD area grew by 0.4 per cent in the fourth quarter of 2010, down from the 0.6 per cent growth recorded in the previous quarter,” Paris-based OECD, a grouping of mostly developed nations, said in a statement on Thursday.

Economic contractions in Japan and the UK added to the sluggishness in growth. While Japanese GDP fell 0.3 per cent in the final three months of 2010, UK’s GDP dropped 0.5 per cent during the same period.

OECD noted that slowdown in Japan partly reflected the “unwinding of stimulus measures to boost domestic demand”, whereas severe weather conditions adversely impacted the British economy.

Earlier this week, official data had showed that German and French economies grew 0.4 per cent and 0.3 per cent, respectively, in the 2010 December quarter.

During the same three months, the 16-nation euro zone - grouping of countries that share common currency euro - expanded less-than-expected at 0.3 per cent.

The American economy rose 0.8 per cent in last quarter of 2010 as compared to 0.6 per cent expansion in the previous three months.

Meanwhile, latest data showed that OECD economies grew 2.9 per cent in 2010 after contracting as much as 3.5 per cent in the previous year.

Many developed and developing countries are grappling with diverse problems such as rising unemployment levels, soaring inflation and widening fiscal deficit.

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