OECD Cuts Forecasts

The Organization for Economic Cooperation and Development released a report today reducing its 2005 economic growth forecast for the industrialized world to 2.6% from 2.9%. The OECD raised its growth forecast for the United Sates from 3.3% to 3.6%. The OECD said that interest rates in the United States will go up in order to keep inflation pressure at bay, but Europe needs a "rapid rate cut". The OECD cut its growth outlook for the Euro-area, from 1.9% to 1.2%. It also cut its growth outlook for Japan. It now expects 1.5% as opposed to its previous 2.1% estimate. Reuters "An interest rate cut ... would not be in the service of the credibility of the euro system or the inflation expectations of actors in the financial markets," said ECB Governing Council member Klaus Liebscher. The ECB is not expected to cut its rates. It has kept them the same for the last two years even while the region's economy has suffered. The current main refinancing rate is 2.0%. Chris is a staff writer for latest ebusiness news