Page last updated at 14:56 GMT, Friday, 8 August 2008 15:56 UK

OECD sees slower economic growth

Car production line
The OECD report makes gloomy reading for leading economies

All major members of the Organisation for Economic Cooperation and Development (OECD) face economic slowdown, the Paris-based body says.

The 30-strong OECD said its research for June indicated "a continued weakening outlook for all the major seven economies".

But it warned that the slowdown was likely to be deeper than expected in the eurozone and the UK.

In contrast, economic growth in China and Brazil was still strong.

The OECD comments are based on its composite index of leading indicators (CLI), which predicts economic conditions in six months' time.

Its indicator for the OECD area fell to 96.8 in June, from 97.4 in May.

A similar indicator for the Group of Seven leading industrial nations fell to 97.0 from 97.4 over the same period.

UK down 0.8 in the month and 4.8 points over 12 months
Canada down 1.1 and 3.9 points
France down 0.9 and 5.1 points
Germany down 0.9 and 5.4 points
Italy down 0.7 points and 4.5 points.

"The latest data for non-OECD member economies tentatively point to expansion in China and Brazil and a downturn in India and Russia," the group added.

The eurozone indicator fell by 0.8 points in June for a 12-month fall of 5.2 points.

The figure for the US economy fell by 0.2 points and was 5.4 points down over 12 months. The June figure for Japan was unchanged but showed a fall of 4.1 points over a year.

China growth

The OECD said its indicator was "designed to provide early signals of turning points (peaks and troughs) between upswings and downswings in the growth cycle of economic activity".

The indicator for China was steady in June and rose by 0.8 points on a 12-month basis. The figure for India fell by 1.5 points in May and was 4.4 points down from the May, 2007 level.

The indicator for Russia fell by 1.2 points in May, but showed a rise of 0.9 points over 12 months. And for Brazil the figure fell by 2.2 points in June but rose by 1.4 points from the level in June last year.

Revised projections

Both the OECD and IMF have steadily revised downwards their expectations for economic growth in 2009, although the IMF recently changed its mind for non-OECD countries.

The expectation of lower growth in Europe, which were reinforced by warnings from ECB president Jean-Claude Trichet on Thursday, have worried the markets and led to falls in the value of the euro against the dollar.

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