The Organization for Economic Cooperation and Development (OECD) has released its latest economic assessment for the G7 group of the world’s largest developed economies. The OECD expects economic growth of just 1.9% among the seven nations, which include the US, Canada, Japan, Germany, the UK, France, and Italy.
The OECD’s chief economist put it this way:
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. We may have stepped back from the edge of the cliff, but there’s still no room for complacency. … The optimistic view on North America contrasts with the much more fragile outlook in Europe, where weak consumer confidence, climbing unemployment and tight credit all point to further falls in activity.
US growth is projected at 2.9% in the first quarter and 2.8% in the second quarter, while Canada is expected to post growth of 2.5% in both quarters. The three Eurozone economies are expected to contract by -0.4% in the first quarter before posting a very modest 0.9% gain in the second quarter. Japan is expected to post growth of 3.4% in the first quarter and just 1.4% in the second quarter.
Fiscal austerity in the Eurozone is not solving the continent’s financial crisis — austerity seems only to make ordinary citizens mad (see our story on Spain here).