ibusinesslines.com March 18, 2018

OECD warns of trade war threat to global economic rebound

13 March 2018, 02:28 | Kelvin Horton

Trump trade war main risk to seven-year high in global growth says OECD

Trade war could derail global economic recovery, warns OECD

"Growth is steady or improving in most G20 countries and the expansion is continuing", said OECD acting chief Economist Alvaro Pereira, "[But] an escalation of trade tensions would be damaging for growth and jobs".

The organization tweaked its outlook for Canada, warning again, about the country's housing market.

Rebounding global business investment would keep global trade growth at about 5 percent this year, the OECD forecast.

The eurozone economy will likely see a robust and broad-based expansion, with growth in gross domestic product estimated at 2.3 percent this year and 2.1 percent next year.

On the likelihood of a backlash against Mr Trump's threatened tariffs, he added: "This could obviously threaten the recovery".

The OECD forecast the US economy would grow 2.9 percent this year and 2.8 percent in 2019, with tax cuts adding 0.5-0.75 percentage points to the outlook in both years. That was higher from a November forecast of 1.2 percent due to the broader global improvement.

The OECD reported that the unemployment rate for those aged 15 to 24 years was 11.4 percent in January, down by 0.2 percentage point.

Among other hot economies, stronger growth in France and Germany boosted the outlook for the broader euro zone to 2.3 per cent for this year and 2.1 per cent in 2019.

In its interim economic outlook report, the OECD projects 3.9 percent global growth for 2018 and 2019, up from the November forecasts of 3.7 percent and 3.6 percent, respectively.

Overall, there were 34.5 million people unemployed in the OECD area over the period, 1.9 million more than in April 2008 before the financial crisis, according to the report. In its quarterly report, the Paris-based research body said it expects growth to ease off in some of those economies this year, but not by as.

As the Chancellor prepared to update MPs on the independent Office for Budget Responsibility's latest expectations for growth and borrowing, the OECD predicted the United Kingdom would see the slowest growth among the G20 economies this year, having largely outperformed rivals since the financial crisis.

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