OECD finds new signs of weakness in world economy
LONDON — More evidence of a weakening global economy emerged Thursday ahead of the Federal Reserve’s decision to take aggressive new steps to stimulate growth in the United States.
A report from the Organization for Economic Cooperation and Development pointed to a slowdown in the coming months in Italy, China, India, and Russia, with weak growth in France and Germany — the two biggest economies of the struggling eurozone.
The study focused on indicators that aim to anticipate turning points in economic activity. They show signs of slightly slower growth in Japan and the U.S., while for Britain and Brazil, they point tentatively to a pickup in activity, albeit at a slow rate, the organization said.
A separate report from the OECD said business spending on research and development — one measure of economic strength — fell 4.5 percent in 2009 in the 34 countries that are members of the organization. Only France and South Korea went against expectations, increasing their spending.
Spending in Asian economies, including some like China and India, which are not members of the OECD, continued to increase. Year-on-year growth in research and development spending by Chinese businesses increased by 29.5 percent in 2010 and by 20.5 percent in South Korea and India.
That means that the crisis has accelerated China’s share in global research and development spending, which climbed from seven percent in 2004 to 10.5 percent in 2008 and jumped to 13 percent in 2009, the report said.
European stocks closed mostly lower ahead of the Fed’s announcement of a third round of bond buying to bolster the U.S. economy. The Euro Stoxx 50, a barometer of eurozone blue chips, lost 0.84 percent. The German DAX stock index dropped 0.45 percent, while the CAC 40 in France lost 1.18 percent. The FTSE 100 in Britain, however, ended up 0.65 percent.