OECD sees global growth slowing as risks persist

Downward revisions are significant for Germany and Italy, as well as for the UK, Canada and Turkey.

According to the latest Interim Economic Outlook from the Organisation for Economic Co-operation and Development (OECD) the global economy is slowing and major risks persist, with growth weakening much more than expected in Europe.

The Organisation says vulnerabilities stemming from China and the weakening European economy, combined with a slowdown in trade and global manufacturing, high policy uncertainty and risks in financial markets, could undermine strong and sustainable medium-term growth worldwide.

The OECD projects that the global economy will grow by 3.3 per cent in 2019 and 3.4 per cent in 2020. The outlook and projections cover all G20 economies. Downward revisions from the previous Economic Outlook in November 2018 are particularly significant for the euro area, notably Germany and Italy, as well as for the United Kingdom, Canada and Turkey.

The Outlook calls on central banks to remain supportive, but stresses that monetary policy alone cannot resolve the downturn in Europe or improve the modest medium-term growth prospects. A new coordinated fiscal stimulus in low-debt European countries, together with renewed structural reforms in all euro area countries would add momentum to a growth rebound, boost productivity and spur wage growth over the medium term.

Additional information is available on the OECD’s website.