G7 economies retreat deeper – OECD

‘Tentative’ signs of improvement

PARIS (AFP)– The Group of Seven major economies are going deeper into reverse but fragile signs that the slowdown is easing are beginning to emerge in a few countries, the OECD said on Friday.

“Tentative signs of improvement in the rate of deterioration in the outlook are appearing in some countries,” the Organization for Economic Cooperation and Development said in a report.

Although signs were noticeable in Italy, France and some smaller OECD countries, they were still highly “tentative,” the group warned amid a growing debate over whether “green shoots” of recovery from the global crisis are emerging.

An increasing number of analysts believe that while the worst global slump since the 1930s has a long way to go, the pace of the downturn is easing, suggesting a recovery is possible at the end of this year or in early 2010.

There are also others who believe such optimism, however qualified, is out of place, with the world economy in the middle of a radical readjustment after years of excess.

The OECD said its index of leading indicators, known as its CLI, painted a “weak” picture for all countries and the outlook had worsened since last month for the United States, Canada, Japan and leading non-OECD economies.

The February CLI for the OECD’s own 30 member countries fell 0.6 points from January and was down 9.7 points from 12 months earlier.

The index for the United States fell 1.1 points in February and was 11.8 points down over 12 months. The Eurozone index fell 0.2 and 8.2 points, and Japan 1.5 and 11.2 points.

In Europe, Germany showed a fall of 0.3 and 12.9 points, France a rise of 0.1 points but a 12-month fall of 4.7 points, and Italy a rise of 0.4 but a 12-month drop of 4.1 points.

For China, the index was down 0.7 and 12.5 points.