Recession Looms as Growth Slows in Developed Countries

Economic growth in developed economies almost ground to a halt in the last three months of 2011, with the U.S. driving what growth there was, according to the Organisation for Economic Co-operation and Development (OECD).

Gross domestic product (GDP) in the 34 economies in the OECD, including the U.S., Germany, Japan and the UK, grew by just 0.1 percent in the last quarter from the previous one. It rose 1.3 percent from the same time a year earlier – the slowest rate of growth in two years.

A resurgence in the U.S. economy, which grew by 0.7 percent, helped keep GDP positive in developed economies.

Embattled Italy, which became the largest euro zone country yet to bring in a new technocratic government in an effort to solve its economic problems, suffered the biggest contraction in growth, with a 0.7 percent fall.

The euro zone’s economy shrank by 0.3 percent during the same period, which many economists believe signals the start of a recession.

Japan’s GDP declined by 0.6 percent over the three month-period.

Central banks including the European Central Bank, the Bank of Japan and the Federal Reserve have tried to avert a so-called double-dip recession by injecting more liquidity into their banking systems in recent months.