Potential trade war threatens global economic growth, OECD warns

Darnell Taylor
March 13, 2018

Amid a global economic recovery boosted by extended investment and trade, South Korea is expected to maintain its 3 percent growth momentum throughout year 2018 and 2019, according to the Organization for Economic Cooperation and Development.

In its interim economic outlook report, the OECD projects 3.9 percent global growth for 2018 and 2019, up from the November forecasts of 3.7 percent and 3.6 percent, respectively.

Mr Pereira said global growth would be led by a recovery in investment, while an increase in trade volumes of 5.2% in 2017 was expected to continue in 2018.

OECD Acting Chief Economist Alvaro Pereira observed: "In this environment, an escalation of trade tensions would be damaging for growth and jobs". But it also warned that the risk of trade wars could derail expansion.

It credited tax cuts in the USA, the world's largest economy, for much of the upgrade - though the worldwide forum warned that protectionist policies were a big risk factor in the forecast.

U.S. President Donald Trump last week formally signed proclamations to impose a 25-percent tariff on imported steel and a 10-percent tariff on aluminum, causing mounting dissent among business groups and trading partners around the world. In 2019, the year the United Kingdom is set to leave the European Union, the OECD predicts that growth will slip to just 1.1 per cent.

RS adjourned till 1400 hrs after ruckus over AP, Cauvery, sealing issues
That is not your money or our money. "The Centre gets more from south India as tax revenue but it spends more in north India", he observed.

Britain was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 percent this year.

This is up from a forecast last November of 3.7% in 2018 and 3.6% in 2019.

"In Japan, where underlying inflation and inflation expectations remain low, current stimulus measures need to be continued to help achieve the inflation target", the OECD said.

In its quarterly report, the Paris-based research body said it expects growth to ease off in some of those economies this year, but not by as.

National Treasury now anticipates growth of 1.5% in 2018, rising to 2.1% in 2020.

"Safeguarding the rules-based global trading system is essential to prevent the longer-term harm to growth prospects that could arise from a retreat from open markets", it said. "Governments of steel-producing economies should avoid escalation and rely on global solutions".

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