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Business

OECD sees Europe in better shape than expected

The Organization for Economic Cooperation and Development (OECD) has said it's revised up its growth forecast for major European economies. But it was less optimistic with regard to China and the US.

In an interim assessment report released on Tuesday, OECD officials said they expected some major European economies to grow faster this year than previously thought four months ago.

The Paris-based club of industrialized nations forecast the German economy to expand by 0.7 percent in 2013, up from a May assessment of just 0.4 percent.

It said France would most likely be able to add 0.3 percent to its gross domestic product (GDP), while the OECD had previously thought the eurozone's second-largest economy would continue to be stuck in recession.

The organization made the most dramatic revision for the UK, saying that the British economy would grow by 1.5 percent, up from 0.8 percent four months ago.

Fed policy repercussions

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OECD: German economy in robust state

By contrast, the OECD saw a central risk to sustainable recovery for both the US and emerging economies such as China. It noted it would be decisive just how the US Federal reserve wound down its easy-money policies.

"It's necessary to continue to support demand, including through unconventional monetary policies, in order to minimize the risk of the recovery being derailed," it said in a statement.

It added it would be important how quickly any changes would be implemented, while in general endorsing the Fed's plans to gradually reduce its monetary stimulus it injected into the US economy from its current level of $85 billion (64.4 billion euros) per month.

hg/dr (AFP, dpa)

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