The economic slowdown in the 30 member nations in the Organization for Economic Co-operation and Development is bottoming out, but the recovery is likely to be weak and fragile, according to the OECD's latest Economic Outlook/Study.

 
The report says that the steepest economic decline in more than 60 years will create long-lasting economic and social damage. The Outlook sees continued downward pressure on inflation over the next two years but little risk of sustained deflation outside Japan. The latest Economic Outlook is the first in two years to offer upward projections in its earlier forecasts for economic growth in the U.S. and the large emerging nations, rather than downward projections. However, its new forecasts for the Euro area are worse than the OECD's previous projections published in March.  "Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis," said Angel Gurrķa, secretary general of the OECD. "According to the OECD forecasts, the U.S. GDP is expected to fall 2.8 percent this year, compared with the OECD's March forecast of a 4 percent decline. U.S. growth in 2010 is now forecast at 0.9 percent compared with a previous forecast of zero percent. The report warns that as the impact of the Obama administration's stimulus measures fades, growth will be restrained by corporations' efforts to increase their savings, and by consumers' efforts to reduce their indebtedness. Unemployment will rise to around 10 percent over the next two years, despite the mild rebound.

Outside the United States, China will be the strongest performer. China's GDP growth is forecast at 7.7 percent in 2009 and at 9.3 percent in 2010. Brazil's GDP is forecast to fall by 0.8 percent in 2009 but to rebound to 4 percent growth in 2010. Russia's is forecast to drop by 6.8 percent in 2009 and to climb by 3.7 percent in 2010. In India, growth is predicted at 5.9 percent in 2009 before accelerating to 7.2 percent in 2010. Japan's GDP is forecast to fall 6.8 percent in 2009 and to rise 0.7 percent in 2010. In the Euro zone, GDP is expected to contract 4.8 percent this year and to show zero percent growth in 2010.