OECD Downgrades Global Growth Forecasts
The Organisation for Economic Cooperation and Development (OECD) stated, that global trade tensions and higher interest rates will influence growth of the global economy in the coming years. According to the OECD, rising interest rates could also spur financial markets to reconsider and thus reprice the risks to which investors are exposed, triggering a return to volatility.
Also, a full-blown trade war and the resulting economic uncertainty could knock as much as 0.8% off global gross domestic product by 2021.
The OECD projects that global growth would slow from 3.7% this year to 3.5% in 2019 and 2020. It had previously projected 3.7% growth for 2019. The forecast for the Eurozone was also slightly darker than in September, with growth seen slipping from nearly 2.0% in 2018 to 1.6% in 2020.
For Britain, the OECD forecast growth would pick up from 1.3% this year to 1.4% in 2019, up from an estimate of 1.2% in September. The OECD forecast Italian growth at only 1.0% this year, lingering at 0.9% in 2019 and 2020.
Meanwhile, the OECD left its forecasts for the US in 2018 and 2019 unchanged, projecting growth in the world's biggest economy would slow from nearly 3.0 in 2018 to slightly more than 2.0% in 2020.