The risk of a global recession has diminished in recent weeks, but the chances of prolonged weak growth have increased, the chief economist of the Organisation of Economic Cooperation and Development said today.
'The risk of recession is smaller than it was a few weeks ago, because the acute risk that can push the world economy rapidly into recession, such as an oil price shock, has reduced significantly,' Jean-Philippe said.
'The disparate risks on the microeconomic side, such as tourism, consumer spending, investment, have been growing in recent weeks, which indicates that growth will remain weak for longer,' he warned.
Cotis also reaffirmed remarks he made last week, in which he said growth in the euro zone would be around 2% this year - two-and-a-half times weaker than the expansion he expects in the US.
'The US will see moderate growth in 2003 of around 2.5%, while Europe is on course for weak growth in the order of 1%,' he said. 'The American recovery is fragile but remains on the right track,' Cotis said, although 'the figures for the first quarter of 2003 are not as good as was expected'.
Cotis also said the US public deficit was likely to reach 4.5% of gross domestic product this year. The euro zone's 2003 growth is, however, set to fall well below the 1.8% predicted by the OECD last autumn.
Today's 1% revised forecast is close to those of the International Monetary Fund (1.1%) and the European Commission (1%), both published this week. The OECD is set to publish its new economic perspectives on April 24.
