Record rate of decline in economic growth

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The Independent Online

Economic growth in the world's major economies fell at a record rate during the first quarter of the year, research showed today.

Gross domestic product (GDP) in the 30 countries that make up the OECD area fell by 2.1 per cent during the three months to the end of March, according to the Organisation for Economic Co-operation and Development.

The drop was the largest since OECD records began in 1960, and followed a 2 per cent decline during the previous quarter.

Economic growth was negative in all of the seven major countries, with Japan posting the biggest fall of 4 per cent, followed by Germany at 3.8 per cent.

The UK fared slightly better with a 1.9 per cent drop, the third smallest decline, placing it behind France, where GDP fell by 1.2 per cent and the United States where it dropped by 1.6 per cent.

France was the only one of the seven where the rate at which economic growth is falling eased during the first quarter.

Year-on-year the OECD countries posted a 4.2 per cent drop in GDP, with Japan again posting the biggest drop of 9.1 per cent, followed by Germany at 6.9 per cent and Italy at 5.9 per cent.

Economic growth in the UK was 4.1 per cent lower than in the first quarter of 2008, while in the US it was down by 2.6 per cent.

Economists have warned that Chancellor Alistair Darling's forecast of a 3.5 per cent decline in GDP during 2009, given in the Budget last month, is overly optimistic.

The 1.9 per cent drop in economic growth in the UK during the first quarter, followed a 1.6 per cent slump in the final quarter of 2008 - the first time GDP has decreased by more than 1per cent in two successive periods since Office for National Statistics records began in 1948.