OECD sees slow recovery and severe unemployment

The industrial world should start its recovery from recession next year, but unemployment will be pushed to new highs, the Organization for Economic Cooperation and Development (OECD) forecasts.

The persistence of high interest rates and low use of industrial capacity was unprecedented since the Great Depression of 1929-33, the OECD said in a semiannual review of recent economic trends in its 24 member countries. A feature of OECD's current outlook is the pronounced improvement in the wage and prices performance in the United States, with 5.5 percent inflation forecast next year. Next year's recovery should be led by stock building and private consumption, but the stronger investments essential for economic growth to be sustained are not part of the forecast, chief economist Sylvia Ostry said.