The Organisation for Economic Co-operation and Development (OECD) has revised its estimate for growth in its 34 member states to 1.4% in 2013, the organization said in a statement today. That number is down from its previous estimate of 2.2%. It would match this year's 1.4%.
In its forecast, the OECD took pains to stress that "decisive policy action is needed" to prevent the U.S.'s looming fiscal cliff and continuing instability in the eurozone from driving the global economy back into recession. It anticipates that the struggling euro area will stay mired in recession until early next year, with that region's GDP contracting 0.1% in 2013. The organization opined that the current financial crisis on that continent "remains a serious threat to the world economy, despite recent measures that have dampened near-term pressures."
Prospects for the U.S. are better. Growth is forecast at 2% for 2013 if the fiscal cliff is avoided, although this represents a downward revision from the organization's previous estimate of 2.6%.
The overall situation is expected to improve in 2014. The OECD expects that the economies of its member states will grow a collective 2.3% that year, with the U.S. posting a 2.8% figure and the euro area gaining 1.3%