We have lowered our forecast for OECD economic growth in 2003 to 2.4 per cent.

The world economy will grow more strongly, by 3.4 per cent, helped by a strong performance by China and India.

The United States will grow by 2.3 per cent in 2002 and by 2.5 per cent next year.

The Euro Area will grow by just 0.9 per cent in 2002 and by 2.1 per cent in 2003.

Germany will be the slowest growing country in the Euro Area in both 2002 and 2003 and this year's budget deficit will breach the stability pact's limit of 3 per cent of GDP.

After shrinking by 0.6 per cent this year, Japan's economy will grow by 1.1 per cent in 2003.

Inflation is set to be at historically low levels, but widespread price deflation does not yet appear imminent.