World jobless total could rise by 25 million?

The global economic crisis will push up unemployment by up to 25 million by 2010, the OECD head forecast on a 'truly scandalous failure' of regulatory supervision.

"We're heading for a loss of between eight and 10 million jobs in the OECD area... and 20 to 25 million in the world as a whole between now and 2010," Angel Gurria said on France's BFM radio.

The International Labour Organisation earlier forecast that the number of global unemployed could go up by 20 million to reach a record high point of 210 million people by the end of 2009.

The Organisation for Economic Co-operation and Development in Paris brings together 30 countries, including all the world's industrialised economies. The group conducts research and publishes economic forecasts.

Gurria also said that European countries should spend more in stimulus plans to kickstart their economies and suggested that the European Central Bank should lower interest rates because of falling inflation.

The European Union should "go beyond" the fiscal stimulus plans already announced, equivalent to around 1.4 percent of GDP, since "all the other major countries are going beyond that," Gurria said.

He also said that the OECD economies were in recession in the current quarter and would remain so for at least the first two quarters of 2009, with many countries being in recession for most of 2009.

"We predict a recovery at the end of 2009 and weak growth in 2010" he said.

Commenting on the build-up to the crisis, Gurria said there had been "a truly scandalous failure of regulation... and supervision", and poor risk management and corporate governance by companies.

Meanwhile there was fresh movement to stop the meltdown, with a decision by US president-elect Barack Obama to add 500,000 jobs to a 2.5-million-job creation goal to kickstart the world's biggest and ailing economy.

Vice president-elect Joseph Biden also confirmed the Obama team was working on a second economic stimulus package. According to US media, they want to craft a package worth between 675 and 775 billion dollars over two years.

In Europe, the Irish government said it was injecting 5.5 billion euros (7.6 billion dollars) to recapitalise three major banks: Anglo Irish Bank, Bank of Ireland and Allied Irish Banks.

British Prime Minister Gordon Brown promised to create at least 100,000 new jobs through a 10-billion-pound investment in infrastructure, in a newspaper interview.

The Bank of England's deputy governor John Gieve said in an interview with BBC television that the bank under-estimated how serious the credit crunch would be even though it knew that "crazy borrowing" was taking place.

Gieve said the Bank of England had predicted a correction as far back as two years ago but he added: "We didn't think it was going to be anything like as severe as it turned out to be."

Source: Economic Times