The U.S. economy will grow only 2.6 percent this year, less than the 3.2 percent previously forecast, an international agency predicted Monday, as sluggish demand hampers efforts to recover from the worst downturn since the Great Depression.
The Organization for Economic Cooperation and Development also warned in its latest economic survey of the U.S. that contrary to prior recessions, the 2007-2009 recession may trigger long-term damage to the economy, with higher long-term unemployment.
In its report, published once every two years, the OECD said the economic recovery is progressing, but that “it could be early 2013, at best” before unemployment returns to its pre-recession level.
The OECD also cut its 2011 growth forecast to 2.6 percent, from its previous 3.2 percent forecast.
The downgrades followed the OECD’s lowering earlier this month of its forecast for the Group of Seven industrialized countries. It said the G-7 will grow by around 1.5 percent on an annualized basis in the second half of 2010 – down from its previous forecast of 1.75 percent in May. The G-7 comprises the U.S., Britain, Canada, France, Germany, Italy and Japan.
PDF This post was submitted by The Associated Press.
