ECONOMY

OECD sees Greek growth in 2012 but lots of risks

Greece?s economy will emerge from a three-year recession and return to growth next year in a recovery that remains ?fraught with risks,? the Organization for Economic Cooperation and Development (OECD) said on Wednesday.

The Greek economy will expand 0.6 percent next year, after contracting 2.9 percent this year, the OECD said in its annual economic outlook published in Paris.

Greece?s deficit, the second largest in the euro region last year, will decline to 7.5 percent of gross domestic product (GDP) this year, while the unemployment rate will rise to 16 percent in 2011, from 12.5 percent last year.

?The path to sustainable public finances and renewed economic growth is clearly fraught with risks,? the report said.

?Many things could go wrong in the international sphere, including a further loss of confidence or a marked weakening in export markets. The government can do little to influence these factors. It can, however, continue to implement the program of fiscal adjustment and structural reform. Indeed, a slowdown in these areas would damage credibility, thereby aggravating the already difficult situation.?

The OECD is more optimistic than the European Commission, which predicted in its spring outlook that the 230-billion euro Greek economy will contract by an annual pace of 3.5 percent this year.

Looking abroad, the Paris-based organisation said that prospects for economic growth in the United States and the eurozone have improved and are predicted to hit 2.6 percent and 2 percent this year, respectively. Overall forecasts for real GDP growth in the OECD?s 34 member states, comprising most of the world?s major economies, remained steady at 2.3 percent in 2011.