Markets

Trade war could derail global economic recovery, warns OECD

Trade war could derail global economic recovery, warns OECD

OTTAWA-The OECD (Organisation for Economic Co-operation and Development) is raising its economic forecast for Canada amid a strengthening global economy, but also warns that tensions are appearing that could threaten global growth.

Upgrading its forecasts, the Paris-based group in part cited US tax cuts for the better numbers.

"Growth is steady or improving in most G20 countries and the expansion is continuing", OECD acting Chief Economist Alvaro Pereira said.

But its brighter outlook came with a major caveat in the wake of the USA decision to slap import tariffs on steel and aluminum and the threat of retaliation by China, the European Union and others.

The OECD added that the tax and public spending reductions in the USA during the last three months and Germany's fiscal stimulus were key factors for upgrading global growth predictions in 2018 and 2019.

The OECD also projected to rise of global GDP growth by 3.9 percent for both 2018 and 2019.

Alvaro Pereira
GETTYAlvaro Pereira has warned that global recovery could be threatened

The global economy will grow close to 4 per cent this year and next, better than previously anticipated, according to the OECD, which added a warning that a trade war could roll back the gains seen in recent years. "Certainly we believe this is a significant risk, so we hope that it doesn't materialise because it would be fairly damaging", Pereira said. However, it believes faster growth in the world's biggest economy will result in four increases in interest rates from the Federal Reserve, the USA central bank, this year. The think tank believes the United Kingdom economy will expand by 1.3% this year, up from 1.2% in November, and by an unchanged 1.1% in 2019.

With tax cuts boosting the economy this and next year, the OECD forecast the upper bound of the target federal funds rate could reach 3.25% by the end of 2019, from 1.5% now.

Among G20 countries, only Russia's growth rate is estimated to have decreased 1.5 percent in 2017. Britain will be the slowest growing major economy, expanding just 1.3 per cent, with investment slowing "amidst continued uncertainty" about Brexit.

Growth in the euro area is set to remain robust and broad-based.

President Emmanuel Macron's social welfare, tax and labour market reforms would help France narrow the gap with Germany, with growth forecast at an 11-year high of 2.2% (+0.4) before easing to 1.9% in 2019 (+0.2).





  • It's complicated: China torn on Trump, Kim talks

    It's complicated: China torn on Trump, Kim talks

    And that's a little worrisome, ' said Senator Jeff Flake, a frequent Trump critic. Trump is never in that game, and I think Kim knows it.
    'American Idol' Reboot Judges Open Up About Reality TV Competition

    'American Idol' Reboot Judges Open Up About Reality TV Competition

    She called this a "pinch me" kind of moment that ended with three "yes" votes and that shiny golden ticket to Hollywood. Once the two men helped Perry to her feet, Richie stated, "Some things you have to do for the business".
    Hillary Nearly Falls Down Stairs Twice In India

    Hillary Nearly Falls Down Stairs Twice In India

    Key aide Huma Abedin is allegedly following behind her on the stairs. "You know, 'You didn't like black people getting rights?" Clinton said Trump remarked positively after Chinese President Xi Jinping's government abolished term limits.
  • Ball in Manchester United's court as Old Trafford prepares for Sevilla

    Ball in Manchester United's court as Old Trafford prepares for Sevilla

    They register one win on the road, but it was against a lowly Malaga side that can't get a win to save their lives at the moment. United will be without Phil Jones , Marcos Rojo , Ander Herrera and Daley Blind , who all missed out through various problems.
    Case Keenum Expected To Sign With Broncos

    Case Keenum Expected To Sign With Broncos

    His 22 touchdown passes were the most by a Minnesota quarterback in a single season since Brett Favre tossed 33 scores in 2009 . He started 15 games for the Vikings in 2016, completing 71.6-percent of his passes for 3,877 yards and 20 touchdowns.
    Who's the next Vikings QB?Case? Kirk? Teddy?

    Who's the next Vikings QB?Case? Kirk? Teddy?

    Like the Jets , Vikings or Broncos , the Cardinals will have to pay a pretty penny if they want Cousins to be their quarterback. Cousins spent the last four seasons with the Washington team, and was the starting qb since the 2015 season.
  • Katy Perry Shocks 'American Idol' Contestant with First Kiss

    Katy Perry Shocks 'American Idol' Contestant with First Kiss

    Season 15 averaged a 2.3 rating and 9.4 million viewers on Wednesdays and a 2.2 and 9.1 million viewers on Thursdays. So, judge Katy Perry invited the teen over to the desk and urged him to plant a kiss on her cheek.
    Heading towards a trade war?

    Heading towards a trade war?

    Last Thursday, Trump hinted he would impose hefty duties on imported steel and aluminum in an effort to protect American producers.

    Aj Styles Talks Potential WrestleMania Match With Shinsuke Nakamura

    Shane McMahon was at ringside and practically ruined the chances of Sami Zayn and Kevin Owens from winning the match. Keep your hopes high and fingers crossed as we anticipate their fight at the WrestleMania #Fastlane.
  • BYU receives 6 seed in NIT, will play Stanford in first round

    BYU receives 6 seed in NIT, will play Stanford in first round

    Baylor also made a deep run in the NIT in 2009, but lost to Penn State in the tournament championship game. The Huskies won two straight over Cal and OSU but would lose to OR on the final day of the regular season.
    Djokovic out as Federer cruises

    Djokovic out as Federer cruises

    I just completely lost rhythm, everything. "I just struggled also a little bit with the health the last couple of weeks". "But. Whereas, here now you play the same guy the next day, so you can really compare, you know, how different conditions are.
    $560m US Powerball victor  allowed to remain anonymous

    $560m US Powerball victor allowed to remain anonymous

    The victor will collect a lump sum of about $358 million, before subtracting for taxes, according to the New Hampshire Lottery. The commission says it will consult with the attorney general's office to determine what to do next regarding the case.