Greg Robb of MarketWatch reported that the OECD thinks that a global economic recovery is not too far away, but authorities still need to wake against exiting aid strategies too early:
Recovery from the global recession is likely to arrive earlier than expected, but it is too soon to trigger exit strategies. "It is important not to get carried away. Green shoots seem likely to growth further in the near-term but will still need careful nurturing by policy if they are to become strong, self-sustaining plants."
The OECD is not expecting a W-shaped double-dip recession, but at the same time isn't predicting a V-shaped recovery. "I don't think any alphabet has a letter that envisions the economy that we have in mind. Somewhere between an 'L' and a 'V'".
The OECD forecast suggests an economic recovery is already underway in the U.S. States. Economic output, as measured by GDP, is expected to rebound to a 1.6% rate in the current quarter in the U.S. and hit 2.4% in the final three months of the year.
The euro-area growth rate should rebound to a 2% rate in the fourth quarter, with solid rebounds in France and Germany.
The Japanese economy should expand at a 1.1% rate in the third quarter before falling 0.9% in the fourth quarter.
The United Kingdom is expected to lag behind other OECD nations and show no growth this year, the forecast said.
Global trade appears to have hit bottom and is rebounding, the OECD said. Growth in China is boosting trade. The risks of an outbreak of inflation remain low, given the slack in many countries, the OECD said. On the other hand, deflation is also unlikely outside Japan.
The first step toward tightening shouldn't be taken until the middle of 2010 at the earliest, the OECD said.
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