China, India can't stop world contraction: OECD

The head of the OECD said today that even continuing growth in China and India will not stop the world economy shrinking, as EU and US leaders remained at odds over how to fight the slowdown.

Angel Gurria echoed a statement from the International Monetary Fund (IMF), which said 2009 would see the first global contraction in 60 years and urged more action from major economies.

"Now we are probably seeing a world which will go negative," Gurria, secretary general of the Organisation for Economic Cooperation and Development (OECD), told reporters in Beijing.

"Because even the positive growth of India and China is not going to be enough to offset the negative growth in (developed countries)."

The IMF earlier said world output would shrink between 0.5 per cent and 1.0  per cent at an annual rate in 2009, the first contraction since World War II.

"Country responses to the global crisis are in an early stage. Measures are still needed to restore financial stability," it warned.

But European Union (EU) leaders rejected pressure for a new cash injection amid growing public unrest, with one million people joining a French rally on yesterday. (AFP)