Europe News

OECD Countries' Growth Slows in Second Quarter

The prospect of a second recession in the developed world looked closer Monday after figures from the Organisation for Economic Co-operation and Development (OECD) showed GDP growth contracted further in the second quarter of 2011.

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Growth in the OECD area slowed to 0.2 percent between April and June, down from 0.3 percent in the previous quarter. GDP growth in the group, which includes much of the euro area, the US and Japan, has now slowed for the fourth quarter in a row.

The future of the euro zone is increasingly concerning investors as Germany and France, the two biggest countries in the single currency, have not announced additional economic measures to deal with potential contagion from struggling peripheral economies, such as Greece.

Some of the region's largest economies, including Italy, are threatened by a high level of debt.

The spectre of recession has come back to haunt the Western world in recent weeks, as anxieties about debt returned to the market. There are also worries that many governments have already used most of the mechanisms available to them for coping with debt during the last slowdown.

In the US, investors are waiting for a speech by Ben Bernanke on Friday, during the Kansas City Federal Reserve's annual Jackson Hole conference.

Growth slowed to 0.2 percent in the euro area during the quarter, down from 0.8 percent in the first three months of the year.

GDP rose by 1.6 percent compared to the second quarter of 2010 in the OECD area, down from an annual rise of 2.4 percent in the previous quarter.

Among the G7 economies, Germany recorded the highest rate of growth on an annual basis, with GDP up 2.7 percent from the same quarter in 2010 as its exports rebounded over the year, and earthquake-hit Japan the lowest growth, as GDP shrank by 0.9 percent following the disaster.