The Organisation for Economic Co-operation and Development has issued new figures showing the scale of the global economic downturn.
Europe's economy is slowing more sharply than predicted, with Britain near recession, and the United States and Japan are faring little better, according to OECD forecasts on Tuesday.
Inflation could ease because of a drop in oil prices and a tentative stabilisation in other commodity prices but the euro zone will have to live without the help of interest rate cuts in the meantime, said OECD chief economist Jorgen Elmeskov.
The US economy, where the current economic downturn in the industrialised world began, did better in the second quarter but is badly weakened by a housing slump that has yet to finish.
"Financial market turmoil, housing market downturns and high commodity prices continue to bear down on global growth while at the same time evolving rapidly," the Paris-based agency, one of the world's main public forecasters, said in a statement.
"OECD short-term forecasting models point to weak activity through the end of the year."
However, the OECD chose not to use the word 'recession' to describe the situation in any of the countries it spoke of, even Britain, where it predicts the economy will contract in the third and fourth quarters, which would satisfy the definition of a recession.
The OECD raised its annual forecast for US growth to 1.8% from the 1.2% it had predicted in June, while it cut its prediction for the euro zone to 1.3% from 1.7%, and for Japan to 1.2% from 1.7%.
For the Group of Seven industrialised nations as a whole, its growth forecast for 2008 was 1.4%, unchanged from the projection it made in June.
Mr Elmeskov said China and India were still growing at rates that put the G7 group to shame, even if they too had slowed a little, and demand from such fast-growing emerging market nations could provide a helping hand to export-oriented G7 countries.
