Looking Up at Italy?

Not since it was established 14 years ago had the Paris-based Organization for Economic Cooperation and Development issued such a gloomy forecast. Released last week, its semiannual economic survey predicted more unemployment and more stagflation for almost all of the industrial countries throughout 1975. And the U.S., said the survey, is and will remain the "most depressed" of all the major countries.

Not too long ago, it was widely assumed that the resources-rich U.S. was better placed than other countries to ride out hard economic times. But the OECD economists reckon that the U.S. gross national product will decline by about 2% next year, after a slide of 1.75% in 1974. The real shocker is that the only other major nation that will show a G.N.P. decline in 1975 is battered Italy --and the U.S.'s slide will be the steeper of the two.

The OECD predicts that unemployment will reach 8% in the U.S. next year, compared to 3.5% to 4% for Britain. Inflation in the U.S. will run at a 10% clip, better than Britain's 18% but worse than the relatively modest 6.75% rate West Germany will enjoy despite its recent shift to stimulative policies.

The report lays much of the blame for the U.S.'s difficulties on American reluctance to steer economic policy toward more stimulus. The OECD economists worry that the "weak picture" they see in the U.S. could spread to other parts of the world. If the U.S. downturn begins to bite deeply into imports, some other countries could be pulled farther down.

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