ECONOMY

OECD to issue recession warning

International organizations are expecting a considerable recession in Greece, while retail sales are plummeting. After the estimate by the International Monetary Fund (IMF) that the country’s gross domestic product will shrink by 1.7 percent this year, the Organization for Economic Cooperation and Development (OECD) is reportedly set to predict, in its report on Greece to be released today, a GDP contraction of 1.3 percent this year and zero growth for 2010. The OECD is also going to forecast that the budget deficit will reach 6 to 7 percent and that unemployment will soar above 10 percent next year after hitting 9.5 percent in 2009. Worse, Greece is sliding on the competitiveness chart, according to the IMF, as the country has an economy that impedes entrepreneurship, the Fund suggests, and is unable to create new jobs. It does not foresee growth in Greece returning to the high rates of previous years, remaining instead at under 2 percent until 2014 in the best-case scenario. National Statistical Service data confirmed yesterday that retail sales have decreased dramatically. Retail turnover, not including fuel, dropped by 10.3 percent in May 2009 compared to the same month in 2008, when there had been an annual rise of 5.9 percent over the previous year. There was also a 3.5 percent annual decrease in the general index for construction in the first quarter of the year.