'Industrial powers face economic slowdown'

PARIS: The world's leading industrialised powers are headed for weaker economic momentum, with oil prices unlikely to show any significant decline, the head of the OECD predicted here today. But Angel Gurria, secretary general at the Organisation for Economic Cooperation and Development, forecast that food prices would fall from their elevated levels.

"There's going to be a slowdown," he said, referring to the 30 OECD member economies, which include the Group of Seven - Britain, France, Germany, Italy, Japan and the United States. The OECD is to publish its official growth forecasts tomorrow.

Gurria, addressing an OECD forum, said the organisation was "not foreseeing a dramatic decrease" in oil prices, which in recent weeks have surged over 135 dollars a barrel. But he urged governments grappling with soaring energy costs to steer clear of subsidising fuel prices as a means of cushioning their populations against the effects of higher oil rates.

"I would not advise any country without subsidies now to start doing it," he said. "When do you decide that (prices are) high enough to justify subsidies?" he asked. "Many countries are spending more on oil and food rather than on health and education, which is their way out of poverty." But of food prices, Gurria said "we have a view that food prices are not going to remain at their present level."