Monday, November 28, 2011
The global economic recovery is running out of steam, leaving the euro zone stuck in a mild recession and the United States at risk of following suit, the OECD said on Monday, sharply cutting its forecasts.
The threat of even more devastating downturns looms if the euro zone does not get to grips with its debt crisis and U.S. lawmakers fail to agree a spending-reduction plan, the Organization for Economic Cooperation and Development warned.
In the absence of decisive action from euro zone leaders, the European Central Bank (ECB) alone has the power to contain the bloc’s crisis, the Paris-based OECD said. In the United States, however, the Federal Reserve had little ammunition left.
While solid growth in big emerging economies would provide a boost, slumping global trade would drag on Chinese output, the OECD said.
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