Economic recovery in G7 countries remains fragile despite some improvement seen for the first half of the year, and North America and Europe are likely to rebound at different speeds, the Organization for Economic Co-operation and Development said Thursday.
In its latest Interim Economic Assessment, the Paris-based think-tank projected 1.9 percent growth for G7 economies in both first and second quarters. The projection show strong variance in outcomes across the group.
"Our forecast for the first half of 2012 points to robust growth in the United States and Canada, but much weaker activity in Europe, where the outlook remains fragile," OECD Chief Economist Pier Carlo Padoan said.
"We may have stepped back from the edge of the cliff, but there's still no room for complacency."
The U.S. economy is seen growing 2.9 percent in the first quarter and 2.8 percent in the second quarter. Canada is seen expanding 2.5 percent each in both quarters.
However, the three big Eurozone economies - Germany, France and Italy - is expected to shrink 0.4 percent in the first quarter. They are seen expanding a modest 0.9 percent in the second quarter.
First quarter growth for Germany is projected at 0.1 percent. The figure is seen rising to 1.5 percent in the following three months. France is expected to contract 0.2 percent in the first three months of the year and expand 0.9 percent in the second quarter.
Growth is predicted to rebound strongly in Japan in the first quarter, with the economy seen expanding 3.4 percent. There after the pace is expected to slow to 1.4 percent in the second quarter.
Factors that threaten the recovery include rising oil prices, weakening activity in emerging market economies, notably China, and a slowdown in world trade growth that reflects weakening global demand, the OECD said.
Padoan noted that government action will continue to be critical, especially in the euro area.
by RTT Staff Writer
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