The claims of inevitable recession made by the Organisation for Economic Co-operation and Development (OECD) have been criticised by a leading market analyst.

Earlier this week the OECD predicted negative growth of 0.3 per cent in the third quarter of the year and negative growth of 0.4 per cent in the final quarter of the year among the G7 group of developed nations.

This follows news from the Office for National Statistics (ONS) that economic growth in the UK during the second quarter of the year was flat.

However, the situation may not be as dire as the OECD has predicted, according to economist Simon Ward of New Star.

While reports would have us believe the second quarter of 2008 was the weakest performance on record since the second quarter of 1992 – the tail-end of the last recession – this may not be the case.

The figures merely compare the first revision to the latest quarter with final GDP estimates for prior quarters.

In fact, there were three quarters after 1992 for which the first revision indicated no growth in GDP – the first quarter of 1999, the fourth quarter of 2001 and the first quarter of 2002.

The latest data shows GDP increases of 0.4 per cent, 0.4 per cent and 0.5 per cent respectively for the three quarters. Clearly, then, there is a significant chance that the current second-quarter number will be revised higher.

Furthermore, the OECD quotes a standard error of 1.2 per cent around its projections, implying the forecast declines are not statistically significant.

“The OECD’s forecasts are hardly authoritative,” explained Mr Ward.

“Back in March, the organisation projected no change in US GDP in the second quarter. The latest estimate shows growth of 3.3 per cent annualised,” he concluded.