The Organization for Economic Co-operation and Development (OECD) has released its interim economic outlook for global growth for 2018 and 2019. While stronger growth is being called for, it does warn of risks to growth and to jobs if trade tension escalates further.
According to the new views, global gross domestic product (GDP) growth is projected to rise to about 4% from a level of 3.7% in 2017. The report cites stronger private investment, a rebound in global trade and stronger employment all pointing toward making for a broad-based recovery.
The world economy is now forecast to grow by 3.9% in 2018 and also in 2019, up from prior forecasts of 3.7% for 2018 and 3.6% for 2019.
24/7 Wall St. has taken out the guts of the call to focus on U.S. growth, followed by Europe and the major growth economies.
The United States is now projected to grow by 2.9% in 2018 and 2.8% in 2019. Prior OECD forecasts were for the United States to grow by 2.5% in 2018 and 2.1% in 2019. The OECD raised its eurozone growth forecasts for 2018 to 2.3% from 2.1% and raised its 2019 forecast to 2.1% from a prior 1.9%.
While the G20 emerging markets are projected to grow much faster than the developed world economies, India and China are expected to lead emerging market economies. India was shown at 6.6% growth in 2017, to rise to 7.2% in 2018 and 7.5% in 2019. China was seen growing 6.9% in 2017 and by 6.7% in 2018 and 6.4% in 2019.
The OECD believes that monetary policy in advanced economies gradually will tighten at different speeds. High national debt levels and high asset valuations are also considered to be key vulnerabilities.
OECD Acting Chief Economist Alvaro Pereira said of the interim outlook:
Growth is steady or improving in most G20 countries and the expansion is continuing. In this environment, an escalation of trade tensions would be damaging for growth and jobs. Countries should rely on collective solutions like the Global Forum on Steel Excess Capacity to address specific issues. Safeguarding the rules-based international trading system is key.