The OECD now estimates a decline in global output this year of 2.75%, the first shrinkage since WWII. World trade is expected to fall more than 6%.
The U.S. is now in its 17th month of recession, the longest decline since the Great Depression. Europe and Japan are in even worse shape.
Marcus Walker, Joellen Perry, and Kelly Evans, The Wall Street Journal: Fresh evidence of the deepening slowdown came from around the world. Euro-zone data Tuesday showed inflation at 0.6% in Europe’s single-currency area for the year through March, the lowest level since official records began in 1996. In the U.S., home prices fell 19% in January compared with a year earlier. Japan’s business-confidence fell to an all-time low in data released by its central bank early Wednesday, a day after the jobless rate there rose to a three-year high.
All together, the world economy will shrink by 2.75% this year, the organisation for Economic Cooperation and Development said. The 30 industrialized countries it tracks now face a far bigger slump than it forecast just four months ago, the OECD said, at 4.3%. The World Bank issued a slightly smaller downgrade of the global economic outlook Tuesday, projecting a contraction of 1.7%. Both institutions forecast a steep and damaging plunge in 2009 world trade, the World Bank at 6.1% and the OECD more than double that.
Thank goodness Nouriel Roubini is finally beginning to make noises about light at the end of the tunnel.
Chart: The Wall Street Journal