Growth for the world's biggest economies is expected to stall in the last three months of this year, according to the Paris-based Organization for Economic Cooperation and Development. The new findings come before a key meeting of finance ministers from the G7 countries.
The latest economic outlook by the Organization for Economic Cooperation and Development (OECD) adds to growing fears that major economies are tilting back into recession. It predicts that major industrialized economies will register an average of 1.6 percent growth during the third quarter of this year, and only 0.2 percent in the last three months of 2011.
U.S. economic growth is expected to slow to just 1.1 percent in the third quarter and 0.4 percent in the last quarter of this year. Europe's biggest economy, Germany, which was posting strong growth earlier this year, is also expected to slow to 1.4 percent in the last quarter.
The report piles on more gloomy economic news before a two-day meeting of finance ministers and central bankers of the G7 nations, which include the United States, Britain, Japan, France, Canada, Germany and Italy.
OECD chief economist Pier Carlo Padoan says that growth is stagnating not only among the G7 major industrialized economies, but across the group's 34 member states.
"We now forecast a much slower growth in 2011 and going forward which amounts to a growth of less than one percent in the G7, with the exception of Japan," he said. "So this is a quite downward revision. This, of course, accompanies the fact that we have seen already significant slowdown in the major advanced economies."
Padoan says it is critical policy makers use all the tools at their disposal to rebuild confidence, including exchange rate adjustments, recapitalizing European banks, and strengthening the architecture of the 17-nation eurozone.
Concern is high about both European and American economies, which are not only struggling with low growth, but also with high unemployment and debt. In Europe, fears are growing that G7 member Italy may be the next country facing a financial crisis - after Greece, Ireland and Portugal.
Friday's G7 meeting is being hosted by France, the current rotating president of the group. According to the OECD, the French economy is expected to slow to 0.4 percent in the fourth quarter of this year.