Trade tensions cloud best global growth outlook in seven years: OECD

Mae Love
March 13, 2018

The UK trails last out of the G20 economies in OECD growth projections for both 2018 and 2019, with Britain's rate of GDP increase declining in both years while many other countries surge ahead.

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.

Álvaro Pereira, the OECD's acting chief economist, urged the United Kingdom to introduce more policies to boost living standards, as well as address regional disparities.

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Mr Pereira said global growth would be led by a recovery in investment, while an increase in trade volumes of 5.2% in 2017 was expected to continue in 2018.

Financial markets have been hit by fears of a trade war following U.S. President Donald Trump's move to slap tariffs on steel and aluminum imports.

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Britain was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 percent this year.

The OECD predicts the fastest world growth since 2011 this year, helped by U.S. tax cuts and spending in Germany. That was higher from a November forecast of 1.2 percent due to the broader global improvement.

By contrast, growth in the global economy is expected to strengthen further from its six-year high of 3.7% in 2017 to reach 3.9% in 2018 and 2019.

"In Japan, where underlying inflation and inflation expectations remain low, current stimulus measures need to be continued to help achieve the inflation target", the OECD said. The OECD, which groups 35 developed economies, called on the world's major nations to avoid a dispute that could impede trade, demand, competition and, ultimately, the health of the global economy.

He said: "Investment is coming back, and so this is very good news for good new for jobs and growth across the economies". "Governments of steel-producing economies should avoid escalation and rely on global solutions".

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.

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