Published: Sat, March 09, 2019
Business | By Eloise Houston

OECD Says Global Growth Slowing; Cuts Global Growth Forecasts

OECD Says Global Growth Slowing; Cuts Global Growth Forecasts

According to the OECD (Organisation for Economic Cooperation and Development) the United Kingdom economy would slide into recession and growth would plunge under 1 per cent. It predicted a light recovery to 1.1 percent growth in 2020.

"Production continues to contract in Argentina, after the financial crisis that the country experienced a year ago and the subsequent hardening of fiscal and monetary policies", said the global body. "Vulnerabilities stemming from China and the weakening European economy, combined with a slowdown in trade and global manufacturing, high policy uncertainty and risks in financial markets, could undermine strong and sustainable medium-term growth worldwide". The cut represents a 0.6 percentage-point revision from the most recent calculations in November and a drop from last year's anticipated growth rate of 1.8 per cent.

Eurozone growth forecast is lowered from 1.8% to 1.0% in 2019.

Germany's GDP growth was revised down from 1.4% to 0.7% this year, France from 1.5% to 1.3% and Italy from 0.8% to -0.2%. "A disorderly exit would economies the costs for the European people".

China's expansion is expected to slow to 6.6 per cent in 2019, while growth in the U.S. is set to ease back to 2.6 per cent. However, the 2020 growth rate was increased from 2.7 percent to 3.2 percent.

The OECD cut forecasts again for the global economy in 2019 and 2020, following on from previous downgrades in November, as it warned that trade disputes and uncertainty over Brexit would hit world commerce and businesses.

However the OECD emphasized that even this projection was based on the assumption of a smooth Brexit.

Economic prospects are now weaker in almost all G20 countries than previously anticipated, the report said.

An EU official said it was unlikely there would be a deal before the weekend, which would mean talks could run close to March 12, a date by which May has promised parliament it will have another vote on her Brexit blueprint.

"This would hit Europe particularly, where motor vehicle exports represent around one-tenth of total European Union merchandise exports to the United States", it said.

European policymakers responded slowly to the financial crisis, with the result the United States recovered earlier and has experienced 10 years of growth.

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