The Organisation for Economic Co-operation and Development (OECD) has predicted that the global economy will grow by only 1% in 2013 in its semi-annual economic outlook report. The new forecast is 1.2% lower than the prediction published by the OECD in May, and Pier Carlo Padoan, the organisation’s deputy secretary-general, stated that “the risk of a new major contraction cannot be ruled out”.

Among the factors behind the weaker growth forecast in the OECD’s report are weakening global trade and rising unemployment, which negatively impacts consumer and investor confidence and spending.

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GDP in the eurozone area, according to the OECD’s prediction, will contract 0.1% in 2013, but will increase by 1.3% in 2014. Japan is expected to record 0.7% growth in 2013 and 0.8% in 2014, while the US is expected to expand its economy by 2% in 2013 and 2.8% a year later.