The OECD cut forecasts again for the global economy in 2019 and 2020, following on from previous downgrades in November, as it warned that trade disputes and uncertainty over Brexit would hit world commerce and businesses, ONA reports citing Reuters.
The Organization for Economic Co-Operation & Development forecast in its interim outlook report that the world economy would grow 3.3 percent in 2019 and 3.4 percent in 2020.
Those forecasts represented cuts of 0.2 percentage points for 2019 and 0.1 percentage points for 2020, compared to the OECD’s last set of forecasts in November.
“High policy uncertainty, ongoing trade tensions, and a further erosion of business and consumer confidence are all contributing to the slowdown,” said the OECD in its report.
“Substantial policy uncertainty remains in Europe, including over Brexit. A disorderly exit would raise the costs for European economies substantially,” added the OECD.
Europe remains impacted by uncertainty over Britain’s plans to exit the European Union, the U.S. - China trade spat and other weak spots, such as signs of a recession in Italy.
For Germany, Europe’s largest economy, the OECD more than halved its 2019 GDP growth forecast to 0.7 percent from 1.6 percent previously. It predicted a light recovery to 1.1 percent growth in 2020. Germany’s export-reliant economy is particularly affected by weaker global demand and rising trade barriers.