OECD Predicts Recession Will Worsen

The Organization for Economic Cooperation and Development Thursday said the U.S. economy was headed for its steepest decline in 2009.

OECD Director of Policy Studies said Jorgen Elmeskov said, “a high degree of uncertainty surrounds the outlook,” that pegs the U.S. economy as falling 0.9 percent in 2009, the economies of Europe falling 0.5 percent and the contraction in Japan hitting 0.1 percent.

“Much depends on the depth and duration of the financial crisis, the main driver of the current recession,” Elmeskov said.

He also said, “the ongoing adjustment in housing markets still has a long way to go.”

OECD’s forecast, issued prior to the G20 economic summit in Washington on Nov. 15, predicts economies in all 30 OECD countries will contract by 0.3 percent in 2009.

Unemployment, currently at 5.9 percent in OECD countries, is predicted to climb to 6.9 percent in 2009 and 7.2 percent in 2010, OECD said in a statement.

“Against this backdrop, additional macroeconomic stimulus is needed,” Elmeskov said.