In its interim economic outlook, OECD downgraded global growth forecast for 2018 and 2019. More importantly, almost all countries covered were downgraded, in either year or both, except Australia, Japan, China, Russia and Saudi Arabia. OECD warned that “escalating trade tensions, tightening financial conditions in emerging markets and political risks could further undermine strong and sustainable medium-term growth worldwide.
OECD Chief Economist Laurence Boone:
- Trade tensions are starting to bite, and are already having adverse effects on confidence and investment plans.
- Trade growth has stalled, restrictions are having marked sectoral effects and the level of uncertainty on trade stances remains high.
- It is urgent for countries to end the slide towards further protectionism, reinforce the global rules‑based international trade system and boost international dialogue, which will provide business with the confidence to invest
- With tighter financial conditions creating stress on a number of emerging economies, especially Turkey and Argentina, a strong and stable policy framework will be key to avoid further turbulence.
