In Focus Risk
A time of caution
The world’s economic future looks precarious amidst increasing political uncertainty
Laurence Boone Chief economist, OECD
The global economy has clearly become increasingly fragile and uncertain, with the growth slowing and downside risks continuing to mount, according to the OECD’s latest edition of our Interim Economic Outlook.
Weakening Economic prospects are weakening for both advanced and emerging economies, and global growth could get stuck at persistently
low levels without firm policy action from governments. Escalating trade conflicts are taking
an increasing toll on confidence and investment, adding to policy uncertainty, aggravating risks in financial markets and endangering already weak growth prospects worldwide. The OECD projects that the global
economy will grow by 2.9% in 2019 and 3% in 2020 – the weakest annual growth
Trade conflicts The research identifies trade conflicts as the principal factor that is undermining confidence, growth, and job creation across the world economy, and underlines that continuation of trade restrictions, and political uncertainty, could bring additional adverse effects. While solid consumer demand has
supported service-sector output to date, persistent weakness in manufacturing sectors, and continuing trade tensions, could weaken employment growth, household income, and spending.
Economic prospects are weakening for both advanced and emerging economies, and global growth could get stuck at persistently low levels without firm policy action from governments. Escalating trade conflicts are taking an increasing toll on confidence and investment, adding to policy uncertainty, aggravating risks in financial markets
rates since the financial crisis, with downside risks continuing to mount. The Interim Economic Outlook covers all of
the G20 economies, and includes our downward revisions to projections from the previous Economic Outlook, in May 2019, for almost all countries, particularly those that have been the most exposed to the decline in global trade and investment, that has set in this year.
October 2019
www.CCRMagazine.com
Substantial Substantial uncertainty persists about the timing and nature of the withdrawal of the United Kingdom from the European Union, particularly as concerns a possible no-deal exit, which could push the UK into recession in 2020 and lead to sectoral disruptions in Europe. Other risks – including the overall
slowdown in the Chinese economy and significant financial-market vulnerabilities from the tension between slowing growth, high debt, and deteriorating credit quality – are also weighing on future growth.
Conclusion The global economy is facing increasingly serious headwinds and slow growth is becoming worryingly entrenched. The uncertainty provoked by continuing
trade tensions has been long-lasting, reducing activity worldwide and jeopardising our economic future. Governments need to seize the opportunity
afforded by today’s low interest rates to renew investment in infrastructure and promote the economy of the future. CCR
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