PARIS - The Organization for Economic Cooperation and Development says the economic recovery in the U.S. and rich nations in Europe will stagnate or go into reverse by year-end, under the weight of government belt-tightening and falling consumer and business confidence.
The OECD forecasts the U.S. economy will grow at only a 0.4 per cent annualized rate in the fourth quarter, while in Europe, the three largest economies in the eurozone will contract by 0.4 per cent in that period.
The OECD warned Thursday that the risk of economic contraction has increased in some major OECD economies, but said that "a downturn of the magnitude of 2008/2009 is not foreseen."
The OECD's update to its May forecasts comes one day before financial leaders from seven of the world's most developed economies meet in Marseille.
