Global recession close to bottoming out: OECD

The worst global economic recession in more than 60 years is close to bottoming out, even as rich economies will contract 4.1 per cent this year, says a group of industrialised nations.

The Organisation for Economic Cooperation and Development (OECD), a club of 30 rich countries, today said the ensuing recovery is expected to be weak and warned that economic, social damage caused by the global crisis would be "long-lasting".

The organisation has projected the OECD economies which includes the US, the UK and Japan, to contract 4.1 per cent in 2009 against 0.8 per cent growth last year.

"OECD activity now looks to be approaching its nadir, following the deepest decline in post-war history. The ensuing recovery is likely to be both weak and fragile for some time.

"And the negative economic and social consequences of the crisis will be long-lasting," the OECD said in its latest Economic Outlook report. The grouping noted that US economy is expected to shrink 2.8 per cent in 2009.

Pointing out that economic activity in the US-- which is officially in recession for more than a year-- could bottom out in the second half of this year.

"Signs have multiplied that US activity could bottom out in the course of the second half of this year. Such a recovery would reflect tremendous policy effort," the report said.

According to the OECD, the Japanese GDP would contract 6.8 per cent this year while that of euro area -- the 16 nations sharing the common currency euro -- would shrink 4.8 per cent in 2009.

"Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis... But the next few months will be equally testing. There needs to be a clear and credible plan and timeline for phasing out the emergency measures as the recovery takes hold.

"It is critical to consider these exit strategies now in order to prevent new risks in the years ahead," OECD Secretary General Angel Gurria said.