OECD adds major trade war caveat to optimistic global outlook

Paris, Mar 13: The global economy will grow close to 4% this year and next, better than previously anticipated, according to the Organisation for Economic Co-operation and Development (OECD), which added a warning that a trade war could roll back the gains seen in recent years. Upgrading its forecasts, the Paris-based group in part cited US tax cuts for the better numbers. It sees the world economy expanding 3.9% in both 2018 and 2019, the strongest since 2011. That’s up from 3.7% and 3.6% respectively compared with its November projections.
But its brighter outlook came with a major caveat in the wake of the US decision to slap import tariffs on steel and aluminium and the threat of retaliation by China, the European Union and others. The OECD, which groups 35 developed economies, called on the world’s major nations to avoid a dispute that could impede trade, demand, competition and, ultimately, the health of the global economy.
“Trade protectionism remains a key risk that would negatively affect confidence, investment and jobs,” it said on Tuesday. “Govern- ments of steel-producing economies should avoid escalation and rely on global solutions.” (Agencies)