Paris: The economies of the developed world turned in their worst quarterly showing ever in the first three months of 2009, the Organization for Economic Cooperation and Development (OECD) said on Monday.
The combined gross domestic products (GDP) of the 30 countries in the organization fell by 2.1% in the January-March period from the previous quarter. If that preliminary estimate holds, it would be the largest drop since 1960, when records were first kept. The GDP of member countries fell 2% in the last quarter of 2008.
Of the seven largest OECD economies (the US, Japan, Germany, Britain, France, Italy and Canada), only in France— where the economy shrank 1.2%—did the rate of contraction ease in the first quarter, the group estimated. Official Canadian data are not yet available.
Compared with the first three months of 2008, the OECD economies—which accounted for 71% of world GDP in 2007, according to the World Bank—shrank 4.2% in the first quarter. The US contributed 0.9 percentage point of that decline, while Japan contributed 1 percentage point, the 13 largest euro area countries 1.3 percentage points, and the remaining member countries 1 percentage point.
Despite the dismal data, there have been signs that the rates of decline in big economies are slowing.
The IFO Institute for Economic Research at the University of Munich said on Monday that its German business climate index rose to 84.2 from 83.7 in April, the second month of improvement. While that was below the consensus reading of 85 that economists polled by Bloomberg and Reuters had expected, Hans-Werner Sinn, president of IFO, said in a statement that the data pointed “to a gradual stabilization of economic output at a low level”.
In Tokyo, the Japanese government said on Monday that while corporate profits and business investment continue to decline, the tempo of worsening in the economy was “moderating”, as exports and industrial production neared what appeared to be a bottom.