Published: Fri, September 20, 2019
Markets | By Otis Pena

OECD sees zero growth for Italy in 2019 - English

OECD sees zero growth for Italy in 2019 - English

In total, the US-China trade war could reduce global GDP growth by between 0.3 to 0.4 percentage point in 2020 and 0.2 to 0.3 percentage point in 2021.

The global economy is set to grow at the slowest pace since the financial crisis, with business investment and trade hampered by an escalating dispute between the US and China that could inflict even more damage over coming years, the Organization for Economic Cooperation and Development said Thursday.

"What looked like temporary trade tensions are turning into a long-lasting new state of trade relationships", OECD chief economist Laurence Boone told Reuters.

The outlook covers all G20 economies and includes downward revisions to projections from the previous Economic Outlook in May 2019 for nearly all countries, particularly those most exposed to the decline in global trade and investment that has set in this year.

Growth prospects for nearly all of the Group of 20 countries were revised down by the OECD, particularly those exposed to declining global trade and investment.

It revised down its 2019 forecast for the 19-country eurozone to 1.1 per cent growth this year and 1.0 per cent in 2020, whereas previously it had been expecting activity in the single currency area to pick up speed.

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The OECD is the latest institution sounding the alarm over the state of the global economy.

The Paris-based group felt the outlook had gotten worse since last updating its forecasts back in May, when it estimated the global economy would expand by 3.2% and 3.4% in 2019 and 2020, respectively.

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, according to the outlook. "Governments should absolutely take advantage of low rates to invest in the future now so that this sluggish growth doesn't become the new normal".

Britain's growth outlook was also lowered as uncertainty over Brexit persists, with the OECD now pencilling in expansion of 1.0 per cent this year and 0.9 per cent in 2020, compared with 1.4 per cent last year.

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 on October 31 which could push the UK into recession in 2020 and lead to sectoral disruptions in Europe, it said. Also, India is likely to lose the tag of the fastest-growing major economy, as China is projected to grow 6.1 per cent in 2019.

Outbound shipments of chips fell 30.7 percent in August from a year earlier, dealing a blow to South Korea, where semiconductors account for one-fifth of its exports.

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