The Paris-based Organization for Economic Development and Cooperation (OECD) published a grim assessment Thursday of the United States economy, saying it was close to recession. However, the OECD suggested European economies will likely fare better this year. Lisa Bryant has more for VOA from the French capital.
The OECD downgraded its estimates for U.S. growth to just 0.1 percent for the first quarter of this year. Overall, the organization predicted the American economy would grow just 1.4 percent in 2008, far below its previous estimate in December of a two percent growth.
The OECD is an international economic research organization based in Paris.
OECD chief economist Jorgen Elmeskov says it might be premature to declare a recession in the United States. But at a press conference in Paris, Elmeskov said the U.S. economy would be extremely weak for at least the first half of this year, hampered by a credit crunch and the collapse of the U.S. housing market.
"It's hard to say how far advanced we are in the U.S. housing construction adjustments," he explained. "The share of GDP housing construction is probably down now to around somewhere like 3.8 percent of GDP. Which correspondents to the average level in previous slumps. But it is clear that this slump has got further to go. There are no signs from any indicator of construction activity that things are about to change."
The OECD said the so-called euro-zone economies - those European Union economies using the euro as their currency - have brighter prospects, and kept the prediction of 1.5 percent growth unchanged.
While a strong euro makes European exports more expensive, it also makes the price of oil cheaper. Still, the organization has raised alarm about possible inflation for the euro-area.
The OECD also issued a somewhat downbeat prognosis for Japan, predicting only a 1.5 percent growth rate for 2008, down from its earlier prediction of 1.6 percent growth.