Friday, August 26, 2011

Growth slows across world's strongest economies

GDP growth across the world’s most developed economies slowed over the second quarter of 2011 to reach just 0.2%, as continued unrest in the global financial markets threatens a second economic collapse.

The 34 member states of the Paris-based Organisation for Economic Cooperation and Development (OECD) all fared worse than was forecast last year, with particularly marked slowdowns across the eurozone area.

Germany’s GDP growth rate plummeted to just 0.1%, prompting fears that stalling in the eurozone’s economic powerhouse could threaten collapse among the bloc’s weaker members.

Japan saw the largest fall, driven of course by the catastrophic earthquake and tsunami that took the lives of some 15,000 people and caused devastating, long-term collapse of industry. Disruption in supply chains resulting from the disaster caused knock-on effects in industry across the world, resulting in muted growth in many developed nations’ industrial sectors struggling.

The US economy increased its growth rate from 0.1% in Q1 2011 to 0.3% in the second, though the forecast had been for 0.5%. Economic growth in the world’s biggest economy serves as a barometer for the broader health of the global economy, and so significant a downward revision reflects the growing pessimism about the state of the global recovery. source