Global economic growth spurt now at an end, concludes OECD

ECONOMIC growth in Canada, Germany, France, Italy and the UK is losing momentum and could slow for the rest of this year.

Japan and the US remain “stable”, the Organisation for Economic Co-operation and Development (OECD) believes, with none of the developed markets it tracks showing signs of any further acceleration.

Its analysis of GDP, commodities prices, consumer and business confidence, industry output, financial conditions and other data aims to shed light on how economies will develop over the coming six to nine months.

The composite leading indicators suggest the harmonised growth spurt across most of the global economy is now at an end, as they are “pointing tentatively to easing growth momentum in the OECD area as a whole”, the group said. Overall the 35 countries covered by the OECD are growing at a pace just below their long-term average. The eurozone tipped below its average too, between May and June, while the UK has been falling further into that territory since September 2017.

Italy’s economy minister said he expects growth to slow to 1.2pc this year and around 1pc next year, down from previous estimates of 1.5pc and 1.4pc respectively. German industrial output fell in June with economists fearing this may be down to an impact from the trade war.

Britain’s second-quarter GDP growth figures will be published tomorrow. Economists anticipate a recovery to 0.4pc, up from 0.2pc in the first three months of the year.

However, the quarterly pace is not expected to accelerate beyond that. Growth has accelerated in the US, rising to an annualised rate of 4.1pc in the second quarter.

This will not be sustained, economists believe, though they still anticipate a solid expansion for the rest of the year.

JP Morgan now anticipated thirdquarter growth of 3.5pc on an annualised basis, slowing to 2.5pc in the fourth quarter and 2.3pc in the opening months of 2019.

Meanwhile major emerging markets have picked up the pace.

The “major Asia five”, as the OECD groups China, India, Indonesia, Japan and Korea, are set to accelerate with growth rising to above their average rate.

Russia and Brazil are currently running at above their long-term averages, though the pace is easing a touch.