Prompt action needed to fix eurozone crisis, OECD warns

31 October 2011 12:20  [Source: ICIS news]

LONDON (ICIS)--Prompt and forceful action is needed to fix the eurozone crisis, restore confidence and prompt stronger economic growth, the OECD warned on Monday ahead of the G20 summit later this week.

The absence of such action will restrict growth in the G20 countries to about 3.9% this year, 3.8% in 2012 and 4.6% in 2013 on average, it said.

“This average masks a wide divergence among country groupings, and emerging-market economies are much more buoyant, despite some softening,” it added.

“Strong, credible medium-term frameworks for fiscal consolidation and durable growth are needed to restore confidence in the longer-term sustainability of the public finances and to build budgetary space to deal with short-term economic weakness,” the OECD said.

It warned that if EU leaders fail to restore confidence and if US fiscal policy turns out to be excessively tight, GDP could fall in some major OECD countries by as much as 5% in the first half of 2013.

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By: Nigel Davis
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