OECD: Europe remains threat to world economy

Wednesday, May 29th, 2013 | Finance News

PARIS (AP) — Europe's shrinking economy risks threatening the global recovery, a leading international body warned Wednesday.

In its half-yearly update, the Organization for Economic Cooperation and Development said that protracted weakness in Europe "could evolve into stagnation with negative implications for the global economy."

The OECD again slashed its forecast for the 17 European Union countries that use the euro, saying it will shrink by 0.6 percent this year, after 0.5 percent drop in 2012. The OECD had predicted a 0.1 percent decline for the eurozone in its report six months ago — and this time last year, it forecast growth of nearly 1 percent for 2013.

The U.S. economy will continue to outpace Europe, the OECD said, with growth of 1.9 percent in 2013 and 2.8 percent in 2014.

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