OECD lowers global growth forecast over trade tensions

PARIS: Global trade tensions and political uncertainty are weighing on the world’s economy, the OECD warned on Wednesday, cutting its global growth forecast for this year to 3.3 per cent, down from the 3.5 per cent it predicted in November.
The Organisation for Economic Cooperation and Development, which groups the world’s top developed economies, also warned of potential risks including China’s slowdown sharpening and knock-on effects of a no-deal Brexit.
“High policy uncertainty, ongoing trade tensions, and a further erosion of business and consumer confidence are all contributing to the slowdown,” OECD said in an interim version of its Economic Outlook.
The OECD revised growth downwards in almost all of the countries in the G20 group of industrialised and emerging nations.
The 19-nation euro zone was particularly hard hit, with predicted growth dropping from 1.8 per cent to one per cent. The growth forecast for Germany sunk to 0.7 per cent from 1.4, while Italy’s was slashed from 0.9 per cent to -0.2.
The OECD said the sharp downturn in the two countries reflected “their relatively high exposures to the global trade slowdown compared with that of France”, which dropped from 1.5 per cent to 1.3.
Britain’s forecast was chopped to 0.8 per cent from 1.4 — but the OECD emphasised that this projection was based on the assumption of a smooth Brexit. If Britain crashes out of the EU without a deal — the two sides are currently in talks ahead of the scheduled leave date on March 29 — the OECD said its outlook would be “significantly weaker”. — AFP