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November 30, 2004 10:12 PM

Global Forecasts for 2005 Growth Are Reduced


Excerpt: The O.E.C.D., a Paris-based economic forum for 30 leading industrial nations, cut its forecast for growth in the United States in 2005 to a 3.3 percent annual rate from the 3.7 percent rate that it predicted six months ago.


Prospects for the global economy next year are growing dimmer as high oil prices hurt consumption and the unchecked rise in the United States trade deficit depresses the dollar, the Organization for Economic Cooperation and Development said Tuesday.

The O.E.C.D., a Paris-based economic forum for 30 leading industrial nations, cut its forecast for growth in the United States in 2005 to a 3.3 percent annual rate from the 3.7 percent rate that it predicted six months ago.

The group's report was even more downbeat on prospects for America's main trading partners. It warned that growth in the 12 nations that use the euro could slip to a mere 1.9 percent rate, more than half a percentage point below the 2.5 percent rate expected in May. Japan, despite a "spectacular comeback" this year, may experience growth of no more than 2.1 percent in 2005, the O.E.C.D. said.

Despite a year of record growth in world trade, Continental Europe is merely "plodding along," said the O.E.C.D.'s chief economist, Jean-Philippe Cotis. With internal demand weak and economic activity overly reliant on exports, little improvement is likely in Europe, and Germany in particular, without more stability in oil prices and the dollar, Mr. Cotis said. The dollar's decline hurts the profit of many companies when they convert export earnings.

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Read all 21 posts in the same category of Economy:

U.S. Quiet on China Trade Tax - Dec 17, 2004
Fed Raises Interest Rates for 5th Time This Year - Dec 17, 2004
OPEC Considers Output Cut to Keep Prices From Falling - Dec 09, 2004
A Plan For U.S. Energy Security? - Dec 08, 2004
Fed Heading For A Pause - Dec 07, 2004
Social Security Reform = New Debt - Dec 06, 2004
Fed Sees Growth, Measured Rate Hikes - Dec 05, 2004
Weak Employment Rport Casts Doubts Over US Economic Strength - Dec 05, 2004
Fed: Inflation Not Setting Off Alarms - Dec 05, 2004
Balancing Act On The Buck - Dec 04, 2004
Job Growth Is Well Below Wall Street Forecasts - Dec 03, 2004
Fed Reports Growth In 11 Of 12 Regions - Dec 02, 2004
Inflation Under Control, Fed Gov. Says - Dec 02, 2004
Borrowing For Social Security Plan? - Nov 28, 2004
No Longer Top Dollar? - Nov 26, 2004
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004