OECD trims economic outlook due to trade woes

Paris, Sept. 20: Global economic growth has peaked in the face of rising trade frictions and emerging market turbulence, the OECD said on Thursday, as it trimmed its earlier outlook.

The world economy is on course for growth of 3.7 per cent this year and next year, up from 3.6 per cent last year, said the Organisation for Economic Co- operation & Development ( OECD).

In its previous economic outlook in May, the Parisbased policy forum had forecast growth of 3.8 per cent this year and 3.9 per cent in 2019, but it said in an update on Thursday that growth had peaked since those last projections were made.

The OECD said trade growth, the engine behind the global upswing in recent years, had slowed this year to around three per cent from five per cent in 2017 as tensions between the US and its major partners weighed on confidence and investment.

“Export order books have started to decline and that has been going on for a few months and what that means is the deceleration in trade growth will continue,” OECD chief economist Laurence Boone said.

“We are seeing the rise of protectionism biting into our outlook,” she added.

Even though the US is the source of these trade frictions, the economic outlook for the US was nevertheless the brightest amongst the Organisation for Economic Co- operation & Development’s major developed economies, thanks to tax cuts and government spending. The OECD left its forecast for the United States growth this year unchanged at 2.9 per cent, but trimmed the forecast for next year to 2.7 per cent, from 2.8 per cent previously.