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Global economic growth forecasts cut again by OECD

Credit: Reuters Studio
Published on March 6, 2019 - Duration: 01:45s

Global economic growth forecasts cut again by OECD

The OECD cut forecasts again for the global economy in 2019 and 2020 as it warned that trade disputes and uncertainty over Brexit would hit world commerce and businesses.

Pascale Davies reports.

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Global economic growth forecasts cut again by OECD

Another bleak outlook for the world economy, according to the latest predictions from the OECD.

It's slashed its global growth forecasts again from 3.5 to 3.3 percent this year and to 3.4 percent next.

The U.S. China trade spat, and China's slowdown, the major risks.

(SOUNDBITE) (ENGLISH) OECD CHIEF ECONOMIST, LAURENCE BOONE, SAYING: "So in in one word if China sneezes we could all get a cold." Another main drag on the global economy- euro zone weakness, it says Some of the biggest downgrades seen in Germany where the OECD more than halved its 2019 GDP growth forecast to 0.7 percent Italy a worry too.

And Britain's imminent departure from the EU.

(SOUNDBITE) (ENGLISH) OECD CHIEF ECONOMIST, LAURENCE BOONE, SAYING: "All the uncertainty linked around the Brexit is obviously a big factor which weakens the British economy and the longer the negotiations last for, the more we'll get this uncertainty waiting on investment and demand." This report came on a day when Australian data showed growth - at just 0.2 per cent - nearly stalled in Q4.

The dismal figures sent the currency down 0.8 percent to a 2-month low - and had investors asking if the Reserve Bank would cut interest rates.

Globally, the OECD says recent U.S. China talks offer no let up to trade either (SOUNDBITE) (ENGLISH) OECD CHIEF ECONOMIST, LAURENCE BOONE, SAYING: "But again I insist this is a short term impact.

At the end of the day everyone loses." Boone called on joint efforts by euro zone governments to restore confidence Though confidence may remain in short supply - with an ECB policy meeting on Thursday likely to forecast more doom and gloom.

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