The Organisation for Economic Co-operation and Development (OECD) has reduced the world economic growth forecasts for the year 2019.
Economic Forecasts of OECD
- The report notes that trade tensions and political uncertainty, including Brexit and erosion of business and consumer confidence are weighing on the world’s economy thereby contributing to the slowdown.
- OECD has cut its 2019 forecast for global economic growth to 3.3% for the current year, down from 3.5% it predicted earlier.
- OECD growth forecasts for Germany sank to 0.7% from 1.4%, while Italy’s fell from 0.9% growth into a recession at -0.2%.
- OECD forecasts noted that the sharp downturn in the two countries reflected “their relatively high exposures to the global trade slowdown.
- The forecasts for France have slipped from 1.5% to 1.3%.
- Britain’s growth forecast has been chopped from 1.4% to 0.8%. For the first time, the growth rates have fallen below 1% since 2009 following the global economic crisis.
- The 19-nation eurozone was particularly hard hit, with predicted growth dropping from 1.8 per cent to one per cent which was contributed to policy uncertainty including those over Brexit.
- The report notes that a sharper slowdown in China would have significant adverse consequences for global growth and trade.
OECD’s forecasts are more downbeat than the IMF’s for many economies, particularly the euro region and the U.K.