MercoPress. South Atlantic News Agency

OECD forecasts US economy zero growth in second quarter

United States economic growth is grinding to a halt, but the Euro zone is doing relatively well so far, according to the latest assessment from the Organisation for Economic Cooperation and Development.

OECD's chief economist, Jorgen Elmeskov said that for the US economy in the coming months "it's going to feel bad" adding that "the financial turmoil is obviously the most evident source of happenings in the current situation. It all started with the subprime and the financial products that were based on subprime but it has spread beyond its origins". The OECD expects the US economy to expand by 0.1% in the first quarter of 2008 with zero growth in the second. The Euro zone should grow by 0.5% and then 0.4%. The UK estimate has been upgraded to 0.6% for both quarters and Japan just 0.3%, falling to 0.2%. Based on these OECD estimates the US economy is on the brink of a recession, but OECD prefers to consider the situation "premature". The US economy is "essentially moving sideways, if not contracting outright". Elmeskov said that for Europe "the sky's not falling in" even if business sentiment had recently tapered off. And he pointed out the strong Euro is helping the European Central Bank fight inflation by making imports cheaper, particularly oil and other commodities.