Global economy slows to decade low: OECD

Global economy slows to decade low: OECD

The OECD global growth projections published on Thursday suggest 2,9% growth for 2020, down from a 3% projection in September.

In its latest economic report, the OECD downgraded its outlook for the country by one tenth of a percentage point from its previous forecast of two-point-one percent in September.

The OECD sees global growth stuck at 2.9% this year and next, and rising slightly to 3% in 2021. "Without coordination for trade and global taxation, clear policy directions for the energy transition, uncertainty will continue to loom large and damage growth prospects", said OECD Chief Economist Laurence Boone when presenting the Outlook in Paris.

Among the major economies, U.S. growth was forecast at 2.3 percent this year, trimmed from 2.4 percent in September as the fiscal impulse from a 2017 tax cut waned and amid weakness among United States trading partners.

Other emerging-market economies are expected to recover "only modestly", she added. It expanded 3.5 percent in 2018.

"A slow recovery of exports and business investment is expected towards the end of 2021 as global trade expands more rapidly", the organization said, adding that the main upside risk stems from a faster recovery of business sentiment and business investment growth.

Downside risks stem from prolonged tensions in global trade, the organization said, adding that investment will continue to slow somewhat, despite higher construction activity, as spending on machinery and equipment weakens.

Boone warned that the OECD was concerned the outlook would deteriorate further due to "unaddressed structural changes more than any cyclical shock". Officials say sluggish trade on the back of the dispute between the USA and China is weighing on the world economy and raising the risk of long-term stagnation.

Chinese Premier Li Keqiang, World Bank President David Malpass, IMF Managing Director Kristalina Georgieva, WTO Deputy Director-General Alan Wolff, ILO Director-General Guy Ryder, OECD Secretary-General Angel Gurria and FSB Chairman Randal Quarles attended a news conference after the "1+6" Roundtable meeting in Beijing on Thursday.

The OECD highlighted the US-China trade war as the reason for this decline.

About 20 minutes into trading, the Dow Jones Industrial Average stood at 27,768.80, down 0.2 percent. Auto sales have declined sharply over the past year. Schwab rose eight per cent. Unemployment is expected to rise to 10.2% in 2021, up from 10% in 2019.

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