Today, the Organisation for Economic Co-operation and Development (OECD) has released its Interim Economic Assessment.
Economic growth in the G7 countries is expected to be firmer through the first half of 2012, but the recovery remains fragile and will likely proceed at different speeds in North America and Europe, the OECD said.
“Our forecast for the first half of 2012 points to robust growth in the United States and Canada, but much weaker activity in Europe, where the outlook remains fragile,” Mr Padoan said. “We may have stepped back from the edge of the cliff, but there’s still no room for complacency.”
The ongoing rebound in employment, stronger consumer confidence, higher equity prices and credit growth are underpinning the recovery, with growth projected at 2.9 percent in the first quarter and 2.8 percent in the second. Canada is projected to grow by 2.5 percent during each of the first two quarters.
Weak consumer confidence, climbing unemployment and tight credit all point to further falls in activity. The euro area’s three largest economies – Germany, France and Italy – will shrink by 0.4 percent on average during the first quarter, before a moderate 0.9 percent growth recovery in the second quarter.
The economy is expected to accelerate through the first half of the year, with growth of 0.1 percent in the first quarter and 1.5 percent in the second.
The French outlook is more muted, with a -0.2 percent reduction in the first quarter followed by 0.9 percent growth in the second.
Weak industrial production and household sentiment suggest recession for the first two quarters of the year, but the most recent indicators have been more positive, resulting in slightly better projected growth for the second quarter, the OECD said.
Japan is projected to rebound strongly in the first quarter to 3.4 percent, before easing to 1.4 percent in the second quarter.
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A number of factors threaten the recovery, including rising oil prices, weakening activity in emerging market economies, notably China, and a slowdown in world trade growth that reflects weakening global demand.
“Government action will continue to be critical, particularly in the euro area, where unfinished policy business on fiscal frameworks, financial firewalls and fundamental structural reforms must move ahead,” Mr Padoan said.