OECD lowers global growth forecast on trade, Brexit worries
Paris: Trade tensions and political uncertainty including Brexit are weighing on the world's economy, the OECD warned Wednesday as it again cut its 2019 forecast for global economic growth. The Organisation for Economic Co-operation and Development lowered its forecast to 3.3 per cent for this year, down from the 3.5 per cent it predicted in November, which was itself a downgrade from a previous 3.7 per cent.
"High policy uncertainty, ongoing trade tensions, and a further erosion of business and consumer confidence are all contributing to the slowdown," the OECD said in an interim version of its Economic Outlook. The OECD, which groups the world's top developed economies, revised growth estimates lower in almost all of the countries in the G20 group of industrialised and emerging nations.
The 19-nation eurozone was particularly hard hit, with predicted growth dropping from 1.8 per cent to one percent. The growth forecast for European powerhouse Germany sank to 0.7 per cent from 1.4, while Italy's fell from 0.9 per cent growth into a recession at -0.2 per cent.
The OECD said the sharp downturn in the two countries reflected "their relatively high exposures to the global trade slowdown compared with that of France", which slipped from 1.5 per cent to 1.3. "Substantial policy uncertainty remains in Europe, including over Brexit.
A disorderly exit would raise the costs
for European economies substantially," the OECD said. Britain's growth forecast
was chopped from 1.4 to 0.8 per cent, which would mark the first time it had fallen
below one percent since 2009 following the global economic crisis.