OECD ups US growth forecast, slashes for Japan, Eurozone

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PARIS, Sept 2 (Internet) The Organisation for Economic Cooperation and Development (OECD) Tuesday increased its forecast for growth in the US economy this year but slashed its predictions for Japan and the Eurozone.brThe OECD, the Paris-based grouping of 30 developed countries, said growth in the US economy would be 1.8 per cent this year compared to 2007, a sharp upwards revision from a prediction in June of 1.2 per cent.brGrowth in the Japanese economy would be 1.2 per cent instead of 1.7 per cent and the Eurozone would expand by 1.3 per cent instead of 1.7 per cent, the organisation said in an interim assessment of leading OECD countries.brThe combined economy of Group of Seven (G7) nations, the world's leading industrialised democracies, was forecast to grow by 1.4 per cent, unchanged from the last analysis by the OECD in June.brThe revision to the 2008 US figure was mainly due to unexpectedly strong data for the second quarter of the year, the OECD explained.brGrowth in April-June figure was revised up by the US government last week to 3.3 per cent over 12 months instead of 1.9 per cent as announced initially.brThis performance was due in part to the external trade balance and partly to fiscal stimulus which was seen quicker than expected, Jean-Louis Schneider, deputy director of the OECD economics department, told newsmen.brIn the third and fourth quarters, the US economy, the world's biggest, is forecast to growth 0.9 per cent and 0.7 per cent on a 12-month basis but these forecasts contain great uncertainty.brThe OECD does not exclude the possibility of a US recession but we do not have projections for negative growth in the next quarters, Schneider added.brIn Europe, the downward revision is also due to second quarter figures, which, unlike the United States, surprised on the downside, Schneider explained.brIn Japan, Elmeskov said only a partial bounceback from the second quarter fall in GDP is expected. brJapan's economy contracted 0.6 per cent in the three months to June from the previous quarter, official figures showed. brOn monetary policy, the OECD argued in favour of keeping interest rates on hold in the United States, Eurozone and Japan.