The Organization for Economic Cooperation and Development on
Tuesday sharply cut its forecast for the world economy, warning that failure to
end the euro crisis and avert a fiscal impasse in the United States could cause
a global recession according to the NY Times.
The organization, based in Paris, predicted that gross
domestic product in its 34 member countries, all of which have developed
economies, would expand 1.4 percent in 2013, significantly below the forecast
of 2.2 percent it made just six months ago.
Even that forecast assumes that United States lawmakers
reach a budget agreement to prevent billions of dollars in tax increases and
automatic spending cuts from taking effect automatically at the end of the
year. If the United States does not
avoid that so-called fiscal cliff, “a large negative shock could bring the U.S.
and the global economy into recession,” according to the forecast….
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