NOVEMBER 20, 2001
Recession - it's official
However there is now no question that the world is in a phase of recession. The Organization for Economic Cooperation and Development says that the world economy is now officially in recession - for the first time in 20 years. The OECD however reckons that the economic situation will improve in the latter part of 2002.
The organization said that the September 11 attacks in the United States caused "a severe shock" for the world economy but that the 10 interest rate cuts announced this year by the US Federal Reserve will help the situation. Interest rates are now at two percent, the lowest level since 1961.
The OECD is predicting that the economy will pick up late next year with growth of 3.8% expected in the US in the second half of the year. The organization said European economies would grow this year by 1.6% but are expected to shrink a little next year as the effects of the US economic changes work their way out the world's economic system.
However the OECD has warned that if this recovery is to occur it is "crucial that the sentiment of insecurity prevailing since September dissipates".