12 August, 2008

The Organization for Economic Cooperation and Development (OECD) reveals that expansion in the 7 biggest economies is set to sluggish further. According to the research conducted by Paris-based organization for the month of June, points towards a continue deteriorating outlook for all the biggest seven economies. The credit crunch and rising costs of food and fuel are the reasons behind the continuous downfall in these economies.

The remarks from the OECD depends on its complex index of leading indicators (CLI), which estimated the economic conditions in 6 months time. Its pointer for the OECD area has decreased by 96.8 in June as compared to the 97.4 in May. Furthermore, a similar indicator for the Group of Seven major industrial nations falls to 97.0 in June as compared with 97.4 in May.

The group revealed that economic development in non-OECD member including China and Brazil was still powerful and would produce more while a downfall will be faced in India and Russia.

The eurozone pointer decreased by 0.8 points in the moth of June for a 12 month downfall of 5.2 points, while the figure for the US economy decreased by 0.2 points and was 5.4 points below over 12 months. For Japan, the June figure was the same; however it did demonstrate a downfall of 4.1 points over 12 months.

According to the figures from the OECD follow those from the International Monetary Fund (IMF) who currently modified its prediction for the UK economic expansion over the next two years.

The bad credit status, decreasing house prices and increasing unemployment led the IMF to declare that growth in the UK will be just 1.4% in 2008 and 1.1% in 2009, fall from the 1.8% for 2008 and 1.7% for 2009 that it previously predicted.