OECD: Global Economy to Shrink 2.75% PARIS -- The world economy will shrink by 2.75% this year, while world trade flows will fall by 13.2%, the Organization for Economic Cooperation and Development said Tuesday. The OECD said it expects the U.S. economy to shrink by 4% this year, the euro-zone economy by 4.1%, and the Japanese economy by 6.6%. "The world economy is in the midst of its deepest and most synchronized recession in our lifetimes, caused by a global financial crisis and deepened by a collapse in world trade," the OECD said in a report. "Tight financial conditions and low confidence are weighing on output and employment. In turn, shrinking activity and income is further undermining bank balance sheets, magnifying the downturn."