Sept. 6 - The economic outlook for developed economies is worse than expected says the OECD in its latest look at European prospects. Rough Cut (no reporter narration).
The outlook for major developed economies has darkened in recent months as the euro zone crisis has spread to the region's core, the OECD said on Thursday (September 6), urging the European Central Bank to intervene on bond markets to rein in the turmoil. Forecasting 2012 growth of 1.4 percent growth for the Group of Seven economies as a whole, the OECD's estimates diverged widely across group, with European countries lagging significantly. (SOUNDBITE) (English) OECD CHIEF ECONOMIST PIER CARLO PADOAN SAYING: "The global outlook in general looks worse than we had in mind three months ago. Growth is slowing including in emerging economies, trade is weakening, and unemployment is high and could be even rising in some cases. We continue to believe that the epicentre of this situation is the euro area crisis which is spreading negative shocks to confidence and trade channels." "But if you look at the global growth and you put that in perspective, with respect to previous development, you see that global growth has been slowing certainly because OECD economies are slowing, the blue bars (on screen), but also because, and this is one additional element that is new and is a source of concern is that emerging economies keeping up recovery throughout the years of the crisis in many occasions are now slowing down. And this maybe also, in part, a consequence of the euro area crisis." "Increasingly on the public debate for sometime now, that some countries maybe forced to exit the euro area. These risks are pushing up yields, which in turn make the situation worse and possibly reinforce the fears of break-up. So we consider exit from the euro area a very negative possibility, which I personally think will not be limited to any single country would spur a chain reaction, political contagion in the euro area becoming unmanageable."