The global economy will slow faster in 2019 than previously expected, with US President Donald Trump's trade war continuing to drag on growth, according to the latest data from the Organization for Economic Cooperation and Development (OECD) released Wednesday. Despite ongoing Brexit uncertainty, the OECD expects the United Kingdom economy to grow at a rate of 0.8 percent - down 0.6 percent - putting it in slightly better stead than Germany. The country's official fourth quarter results for 2018 won't be issued until March 21 by the national statistics institute INDEC.
That would be a slowdown from last year's 3.6 per cent. Since the organization last downgraded its forecast in November, little has gone right for the world's biggest economies. While 2020's fresh growth estimate is 3.4%, down by 0.1%.
Its report on Wednesday argued that "the priority in these economies is to undertake reforms that improve the prospects for fiscal and financial sustainability in the medium term".
Britain's growth forecast was chopped from 1.4 to 0.8 percent, which would mark the first time it had fallen below one percent since 2009 following the global economic crisis.
"In Europe, there are still considerable political uncertainty, including the Brexit", it said.
"The global expansion continues to lose momentum, '" said the OECD as it downgraded its forecast for nearly every Group of 20 nation's economy.
Yet another positive factor was the new government's plan to spur infrastructure projects and raise oil output, said the OECD.
The picture could further deteriorate under a disorderly Brexit scenario as the OECD expects that the UK's plan to revert to World Trade Organization terms of trade with the European Union would reduce output by 2% over the next two years. Link Securities understand that the sharp fall of the automotive sector in European stock markets in the last 12 months is not only a outcome of the poor political management of the diesel crisis and of the imposition of new emissions standards on carmakers, but also the potential risks that the U.S. will try to pressure the EU with the imposition of tariffs on the sector to force the region to increase the purchase of United States products, especially in the agricultural sector, something on which the EY does not seem disposed event to start negotiating.
Growth in China, which faces an economic slowdown, was revised down slightly to 6.2 percent from 6.3 percent for this year and was steady at six percent for 2020.
The Paris-based think tank slashed the global growth projections for this year and next, while warning that further trade restrictions and policy uncertainty would have additional adverse effects on global growth. Governments should intensify multilateral dialogue to limit risks and coordinate policy actions to avoid a further downturn, she said.