OECD warns of trade war threat to global economic rebou…
An improved outlook for world economic growth will be placed at severe risk if a trade war results from US metal tariffs, a report has warned.
In its latest snapshot on global performance the Organisation for Economic Cooperation and Development (OECD) raised its growth forecast for both 2018 and 2019 to 3.9% – the highest since 2011 – from a previous estimate of 3.6%.
It credited tax cuts in the US, the world’s largest economy, for much of the upgrade though the international forum warned that protectionist policies were a big risk factor in the forecast.
The OECD’s acting chief economist Alvaro Pereira said any trade war resulting from US President Donald Trump’s planned import duties on steel and aluminium products, would prove “fairly damaging”.
The report revised 0.4% higher its predictions for US growth – hitting 2.9% this year.
It said the eurozone would also grow by more than originally expected – at a rate of 2.3%.
But while it also revised slightly upwards its expectations for the UK economy – to growth of 1.3% during 2018 – it said Brexit uncertainty would continue to weigh on performance.
As the Chancellor prepared to update MPs on the independent Office for Budget Reponsibility’s latest expectations for growth and borrowing, the OECD predicted the UK would see the slowest growth among the G20 economies this year, having largely outperformed rivals since the financial crisis.
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