LONDON -- Developed economies grew at the slowest rate in almost seven years during the second quarter, figures released by the Organization for Economic Cooperation and Development showed Wednesday.
The OECD said the combined gross domestic product of its 30 members between April and June increased 0.2% from the first quarter of 2008 and 1.9% from the second quarter of 2007.
That represented a marked slowdown as the combined effects of the credit crunch and high commodity prices took an increasing toll on activity. In the first three months of the year, quarterly growth was 0.5%.
The OECD said its member economies last grew more slowly in the third quarter of 2001, when their combined GDP contracted 0.1%. The annual rate of growth was last lower in the second quarter of 2003, when it came in at 1.4%.
Growth was slowest in the Group of Seven leading industrial nations, whose combined GDP grew just 0.1% on the quarter as Japan, France, Germany and Italy all experienced contractions.
The U.S. economy was the best performing of the G7, growing 0.5%. Indeed, of the 1.9% year-to-year increase in economic output recorded by OECD members in the second quarter, the U.S. accounted for 0.6 percentage point. The euro zone continued at 0.4 percentage point and Japan at just 0.1 percentage point.
In its twice-yearly Economic Outlook released in early June, the OECD cut its 2008 and 2009 growth forecasts for the 30 developed economies that are its members. It now expects their combined gross domestic product to expand 1.8% this year and 1.7% next, having forecast in December that their combined GDP would increase 2.3% and 2.4%, respectively.
The OECD had expected the euro-zone economy to grow more strongly than the U.S. this year, but that now seems in doubt following a weak quarter for the currency area. It registered its first contraction since well before the introduction of the euro in 1999, and now appears headed for a technical recession, defined as two consecutive quarters of declining output.
-By Paul Hannon |
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