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OECD Economic Outlook and Interim Economic Outlook

Upcoming release: the Economic Outlook on 21 May 2019

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06-06-2019 GDP release: Large revisions for: Canada; Germany with growth well below 1%; Italy, in recession; the UK, below 1 as well; Turkey, also in recession. And revisions to Germany and Italy are largely responsible for the significant revision to the euro area. 

Global growth is slowing after reaching a peak in 2017. Growth continues to decouple: it remains strong in the US, but it starts plateauing. More worryingly, it has markedly slowed in the euro area. So why are we in this position?

Trade continues to drag us down. Trade growth has slowed further, to 4% in 2018 from 5 ¼ in 2017. EA trade growth has fallen sharply to zero, partly due to weaker demand for exports, notably from China: exports to China were growing at 13% in 2017, the growth rate was zero at the end of 2018.

Confidence or undermined confidence, is behind a lot of these projections. Trade tensions and policy uncertainty take a toll on confidence and hiring intentions. This is particularly worrying as the labour market is still one of the few bright spots and wages have only started to pick up. 

A slowdown in China would weigh on growth across the world. If we look at it through trade linkages only: a 2ppt decline in the growth rate of Chinese domestic demand would reduce global GDP growth by close to 0.4 [or a bit above 1/3 of a] percentage point in the first year already.

A slowdown in the euro area could spill over to credit conditions. Banks conditions are not independent across euro area countries; or to put it differently, another risk is that weakness in one country’s banking sector could spill over to other euro area countries. 

Since the Brexit referendum, the UK has lost between 0.7 % and 1.7% of GDP. Investment has fallen behind other OECD countries. The more the uncertainty goes on, the more these effects will manifest. Weaker demand in the UK is also weaker demand towards the rest of the EU.

A combination of these risks could further weaken euro area growth. Through trade linkages further weakness coming from China, or Germany or Italy and even the UK can significantly spillover across euro area countries.

EMEs face a record level of coporate debt repayments over the next 3 years. For emerging market companies, the amount due within the next 3 years has reached a record of 47% of total outstanding amount, almost double the % in 2008.  This makes EMEs vulnerable to changing market conditions and in particular increasing interest rates.

Interest rates are set to stay low for longer.

Public debt levels vary between countries but trend growth is low in most euro area countries.

Euro area: coordinate fiscal support and structural reforms to avoid a downturn and spur wages.

06-06-2019 GDP release: Large revisions for: Canada; Germany with growth well below 1%; Italy, in recession; the UK, below 1 as well; Turkey, also in recession. And revisions to Germany and Italy are largely responsible for the significant revision to the euro area. 

Global growth is slowing after reaching a peak in 2017. Growth continues to decouple: it remains strong in the US, but it starts plateauing. More worryingly, it has markedly slowed in the euro area. So why are we in this position?

Trade continues to drag us down. Trade growth has slowed further, to 4% in 2018 from 5 ¼ in 2017. EA trade growth has fallen sharply to zero, partly due to weaker demand for exports, notably from China: exports to China were growing at 13% in 2017, the growth rate was zero at the end of 2018.

Confidence or undermined confidence, is behind a lot of these projections. Trade tensions and policy uncertainty take a toll on confidence and hiring intentions. This is particularly worrying as the labour market is still one of the few bright spots and wages have only started to pick up. 

A slowdown in China would weigh on growth across the world. If we look at it through trade linkages only: a 2ppt decline in the growth rate of Chinese domestic demand would reduce global GDP growth by close to 0.4 [or a bit above 1/3 of a] percentage point in the first year already.

A slowdown in the euro area could spill over to credit conditions. Banks conditions are not independent across euro area countries; or to put it differently, another risk is that weakness in one country’s banking sector could spill over to other euro area countries. 

Since the Brexit referendum, the UK has lost between 0.7 % and 1.7% of GDP. Investment has fallen behind other OECD countries. The more the uncertainty goes on, the more these effects will manifest. Weaker demand in the UK is also weaker demand towards the rest of the EU.

A combination of these risks could further weaken euro area growth. Through trade linkages further weakness coming from China, or Germany or Italy and even the UK can significantly spillover across euro area countries.

EMEs face a record level of coporate debt repayments over the next 3 years. For emerging market companies, the amount due within the next 3 years has reached a record of 47% of total outstanding amount, almost double the % in 2008.  This makes EMEs vulnerable to changing market conditions and in particular increasing interest rates.

Interest rates are set to stay low for longer.

Public debt levels vary between countries but trend growth is low in most euro area countries.

Euro area: coordinate fiscal support and structural reforms to avoid a downturn and spur wages.

@OECDeconomy

Previous releases

OECD Economic Outlook, Volume 2018 Issue 2

Global Economic Outlook, November 2018

General assessment of the macroeconomic situation
Decoupling of wages from productivity: what implications for public policies?
Developments in individual OECD and selected non-member economies
Statistical annex

Interim Global Economic Outlook Assessment, September 2018 


OECD Economic Outlook, Volume 2018 Issue 1

Global Economic Outlook, May 2018

General assessment of the macroeconomic situation
Policy challenges from closer international trade and financial integration
Developments in individual OECD and selected non-member economies
Statistical annex

Interim Global Economic Outlook Assessment, March 2018



OECD Economic Outlook, Volume 2017 Issue 2

Global Economic Outlook November 2017

General assessment of the macroeconomic situation
Resilience in a time of high debt
Developments in individual OECD and selected non-member economies
Statistical annex 

Interim Global Economic Outlook Assessment, September 2017


OECD Economic Outlook, Volume 2017 Issue 1

Global Economic Outlook, June 2017

General assessment of the macroeconomic situation
How to make trade work for all
Developments in individual OECD and selected non-member economies
Statistical annex 

Interim Global Economic Outlook Assessment, March 2017


OECD Economic Outlook, Volume 2016 Issue 2

Global Economic Outlook, November 2016

General assessment of the macroeconomic situation
Using the fiscal levers to escape the low-growth trap
Developments in individual OECD and selected non-member economies
Statistical annex 

Interim Global Economic Outlook Assessment, September 2016


OECD Economic Outlook, Volume 2016 Issue 1

Global Economic Outlook, June 2016

General assessment of the macroeconomic situation
Promoting productivty and equality: a twin challenge
Developments in individual OECD and selected non-member economies
Statistical annex 

Interim Global Economic Outlook Assessment, February 2016


OECD Economic Outlook, Volume 2015 Issue 2

Global Economic Outlook, November 2015

General assessment of the macroeconomic situation
Cool policy: climate change mitigation supporting growth
Developments in individual OECD and selected non-member economies
Statistical annex 

Interim Global Economic Outlook Assessment, September 2015


OECD Economic Outlook, Volume 2015 Issue 1

Global Economic Outlook, June 2015

General assessment of the macroeconomic situation
Developments in individual OECD and selected non-member economies
Lifting investment for higher sustainable growth
Statistical annex 

Interim Global Economic Outlook Assessment, March 2015


OECD Economic Outlook, Volume 2014 Issue 2

Global Economic Outlook, November 2014

General assessment of the macroeconomic situation
Developments in individual OECD and selected non-member economies
Statistical annex 

Versions prior to November 2014 can be found here.

>> See also Economic Policy Papers, produced in the context of the work carried out on the two regular titles, OECD Economic Outlook and Going for Growth.