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OECD: Greek economy not strong enough to avoid recession

02 August 2009 / 19:08:47  GRReporter
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Following last week's grim forecasts for the Greek economy, published by IMF, this week another international organization has issued a warning for the country's wealth.

After a two week surge, stock exchanges around the world had a quiet last week. The Athens Stock Market gained only 0.7% closing at 2362.5 points this Friday. London's FTSE 100 also failed to impress, recording a 0.2% gain to 4610.2 points. Markets in the US on the other hand fared better, with Dow Jones closing at 9181.7 points, which is a 1.2% increase on last week's numbers. At the same time, Standard and Poor's 500 closed at 985.90 points, down from last week's record 996 points. Some analysts were hoping that the index would cross the 1000 point barrier, recorded for the last time on the 4th of November 2008, but were eventually disappointed. The Japanese' Nikkei beat all of the international indices, gaining 3.2% to close at 10356.8 points.

Also this week, another international organization has issued a warning for the country's wealth. As you probably remember, IMF's report of last week claimed that Greek unemployment is expected to leap to 9.5%, and the country's economy will enter a two-year recession. This week, the Organization for Economic Co-operation and Development (OECD) issued a 156 page long report on the Greek economy, expressing its concerns that the economy won't be able to avoid recession. Advice on their part is not new for Greece and cover's most of IMF's recommendations for the last six months - public sector reform, tax system reform, health and education too. According to OECD, limiting tax relief will boost public finances.

On the same topic, the Greek government is already drafting tax system reforms. Bonuses and family allowances will be taxed at 40%, rather than the previous 15% and 20% respectively.

 The rest of the economic news - Petrol price saw a downturn this week, losing almost $3, reaching $63.35, following the news that the US has already increased its petrol reserve, and falling manufacturing demand data. Because of the downturn, petrol companies have reporter worrying results, with Shell losing 70% in revenue and Total losing 54%.

Tags: news from greece recession crisis OECD
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