Eurozone economy shows signs of improving, says OECD

THE eurozone is showing small signs of improvement, the Organisation for Economic Co-operation and Development said yesterday.

The OECD’s leading indicator, a measure that seeks to flag turning points in economic activity, rose for the eurozone area in January, adding 0.2 percentage points in the single currency bloc.

Other areas of the globe which the OECD flagged yesterday for “possible changes in momentum” included Canada, India and Russia. The organisation sees slowing growth in China.

While the eurozone is almost certainly in recession, most economists hope the agreement on Greek debt and the European Central Bank’s decision to pump €1 trillion into the European banking system will be enough to ensure that the recession is mild.

While making no predictions for smaller members such as Ireland, the data used by the Paris-based think tank suggests the economy has turned here and the reading was the highest since March last year.

Similar data for Greece and Portugal also suggests a turning point in the other bailout countries.

The OECD also predicts a turning point for Britain, our biggest trading partner.

Improvements detected in previous months in the United States and Japan continued, with rises respectively of 0.7 and 0.5 percentage points in January, the OECD said in a statement.

“The United States and Japan continue to drive the overall position but stronger, albeit tentative, signals are beginning to emerge within all other major OECD economies and the euro area as a whole,” it said.

Brazil and China show signs of weakening, said the OECD, which reported a 0.6-point drop for China and 0.2-point drop for Brazil in January.

The OECD grouping of more than 30 mostly industrialised nations said its measure rose for a third straight month in January, this time by 0.4 points, marginally more than the rises of the previous months.