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G-20 economies slow, eurozone contracts: OECD

PARIS— Economic growth in the top G-20 countries slowed to 0.6 per cent in the second quarter of 2012 from 0.7 per cent in the first quarter, with slow and weak growth set to continue, the OECD said on Thursday.

The Chinese economy picked up but output in the eurozone, Japan and South Korea slowed sharply. Britain and Italy also showed shrinking output data.

Some emerging economies showed relatively resilient growth, the data showed.

The easing for the G-20 (Group of 20) area marks the third quarter running of slowing growth but “masks diverging patterns,” with a moderate slowing in the United States and contraction in the eurozone, the Organisation for Economic Cooperation and Development said.

Growth in China picked up to 1.8 per cent from 1.6 per cent and in Brazil to 0.4 per cent from 0.1 per cent, in Indonesia to 1.6 per cent from 1.4 per cent and in South Africa to 0.8 per cent from 0.7 per cent.

Turkey achieved a turnaround from contraction of 0.1 per cent to growth of 1.8 per cent.

In Japan growth fell to 0.2 per cent from 1.3 per cent and in South Korea top 0.3 per cent from 0.9 per cent output. In Australia, output also slowed sharply to 0.6 per cent from 1.4 per cent. The slowdown was less marked in the United States where activity growth eased to 0.4 per cent from 0.5 per cent, in Germany to 0.3 per cent from 0.5 per cent and in India 0.8 per cent from 1.1 per cent. Output in France was flat at zero in both quarters.

In Britain output contracted for the third quarter running, to minus 0.5 per cent from minus 0.3 per cent, and in Italy for the fourth quarter, which showed minus 0.8-per cent growth in the last two quarters.

For the whole of the 27-nation European Union, output contracted by 0.1 per cent from a zero reading in the first quarter and for the 17 eurozone countries it shrank by 0.2 per cent from growth of 0.4 per cent.

According to the OECD’s composite index of leading indicators slowing and weak growth is set to persist in the coming quarters in most leading economies.

The eurozone looks set to achieve weak growth, led by France and Germany. Italy is set for a further slowdown, however.

Data also points to a further slowdown in China, India and Russia. But Britain and Brazil look set for a pick up in growth, while Japan and United States should still see above trend growth if slowing from previous quarters, said the OECD.