20/09/2018 - The global economic expansion appears to have peaked, with diverging growth prospects worldwide and intensifying risks, according to the OECD’s latest Interim Economic Outlook.
Economic growth prospects are now slightly weaker across the board than anticipated in May, when the OECD released its latest Economic Outlook. Escalating trade tensions, tightening financial conditions in emerging markets and political risks could further undermine strong and sustainable medium-term growth worldwide.
GDP Growth is diverging
The Outlook identifies the worrisome slowdown in trade growth - combined with widespread political uncertainty - as the principal factor weighing on the world economy. It underlines that further trade restrictions could have adverse effects on jobs and living standards, particularly for low-income households.
“Trade tensions are starting to bite, and are already having adverse effects on confidence and investment plans,” said OECD Chief Economist Laurence Boone. “Trade growth has stalled, restrictions are having marked sectoral effects and the level of uncertainty on trade stances remains high. It is urgent for countries to end the slide towards further protectionism, reinforce the global rules‑based international trade system and boost international dialogue, which will provide business with the confidence to invest,” Ms Boone said. “With tighter financial conditions creating stress on a number of emerging economies, especially Turkey and Argentina, a strong and stable policy framework will be key to avoid further turbulence.”
The Outlook calls on policymakers to enhance resilience, boost productivity and improve inclusiveness. Policy should address the root causes of financial market pressures, including excessive asset prices and indebtedness in various forms, both public and private; improve resilience to shocks in both emerging and advanced economies; steer fiscal policy toward measures that support long-term growth; and focus reforms on skills and labour market inclusion to improve opportunities for all.
Media queries should be directed to the OECD Media Office (+33 1 4524 9700).
For more information, visit: http://www.oecd.org/economy/outlook/economic-outlook/.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.