From EurActiv :
As the economy continues to shrink, massive unemployment is expected to spur social and political unrest across the industrialised world, warned the OECD in economic projections presented today (31 March). Meanwhile, the ECB is expected to further slash interest rates at its meeting on Thursday.
Presenting its interim outlook for major world economies, the Organisation for Economic Co-operation and Development (OECD) said the 30-nation bloc's economy will likely contract by 4.3% this year and staying "mostly flat" in 2010.
Weak export markets, falling investment and a continuing credit crunch will hit euro-area activity hard over the coming six months. The recovery will only begin to build momentum by the middle of 2010. GDP is projected to drop 4.1 percent in 2009 and by 0.3 percent next year. Consequently, unemployment will climb continue to climb om the coming months.
According to the OECD, by the end of 2010, the unemployment rate could be approaching double digit figures in all G8 countries with the sole exception of Japan. In the OECD area as a whole, this would compare with a 5.6% low in 2007. About 25 million workers are expected to lose their jobs, pushing entire families into poverty.
"Governments need to take quick and decisive action to avoid the financial crisis becoming a fully-blown social crisis with scarring effects on vulnerable workers and low-income households," OECD Secretary-General Angel Gurría told G8 labour and employment ministers over the weekend.
Gurria noted that the fiscal stimulus packages introduced so far include additional funds for the labour market and social policy measures. But "the bad news is that the additional funds are rather limited, accounting for about 8-10% of total expenditure in the United States and France and less in most of the other countries. This may turn into a missed opportunity," he said.
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