The US economy is teetering on the brink of recession but the euro zone economy could pull through the global financial crisis without special measures, the OECD said today.
The organisation slashed US growth prospects in the first half of this year, saying the latest data 'suggest that the US economy is now essentially moving sideways, if not contracting outright.'
US output was now expected to grow by 0.1% in the first quarter, a sharp reduction from 0.3% estimated in December, and to show zero growth in the second quarter, a sudden halt compared with 0.4% estimated previously.
However, chief OECD economist Jorgen Elmeskov said 'it may be premature to declare a US recession,' in remarks that also implied concern about a risk of stagflation.
The interim assessment said the euro zone economy would grow by 0.5% in the first quarter, up from 0.4%, but by 0.4% in the second quarter, down from 0.5%.
In Japan, first-quarter output would grow by 0.3%, down from 0.4%, but in the second by 0.2% down from 0.4%.
Warning that the crisis had hit growth global prospects more than expected in the last three months, the OECD said the economy in Japan also seemed to be slowing down but the authorities there had little room to boost activity.
The OECD praised action by the Federal Reserve and US government to boost the US economy through lower interest rates and a fiscal injection, but said the euro zone did not need such stimulus.
'In the euro area, the near-term outlook for activity and inflation does not point to a need for stimulus and automatic fiscal stabilisers will provide more support than in other regions,' Elmeskov said.
The OECD brings together the governments of 30 mostly developed democratic countries, including the three powers of North America, most of Europe and Asian Pacific members Australia, Japan, South Korea and New Zealand.