The growth of the world economy will slow down to 2.9% in 2019 and 3% in 2020, calculated this Thursday, the OECD, which lowered its previous forecasts and warned that this is the annual growth weakest since the financial crisis of 2008. In its outlook report interim, it reviews the forecasts biannual launched in may, the Organization for Economic Cooperation and Development (OECD) cut three tenths of a point to its projection for this year, and another four for the coming , in line with a trend that extends in the larger economies.
Those same drops are applied to the G20, the group of major developed and emerging nations, with a projected growth of 3.1% and 3.2%, while that in the Eurozone, the adjustment is more mild, one and four-tenths, to a rise in respective of 1.1% in 2019, and 1% in 2020.
After a rise of the global economy from 3.6% in 2018, their conclusions for the short-term are crisp. The landscape has become "increasingly fragile and uncertain," , fuelled in large part by trade tensions and policies, which undermine confidence and investment.
In may had already lowered their perspectives, and in this new report, the organization with headquarters in Paris confirmed that, according to the latest economic events and financial statements, the slowdown will last longer than expected. Also, business investment will fall by 9% in 2020 , while inflation is projected to rise by 0.75 percentage points due to the higher cost of import.
trade War and Brexit without agreement
The weight of the uncertainty lies mainly in the trade war between the united States and China, and the prospect of a Brexit without an agreement.
The introduction of tariffs on a bilateral level between Washington and Beijing since the beginning of 2018 will continue to drag the activity, and global trade in the next two years and "could reduce the rise in global GDP between 0.3 and 0.4 percentage points in 2020 and between 0.2 and 0.3 in 2021". Although these two countries recorded two of the increases higher for the next two years, the OECD stresses that will be most affected.
at the time, the agency estimated that the u.s. economy will grow 2.4% in 2019 and 2% in 2020, four and three tenths less than in the forecasts of may, and that china will advance 6.1% and 5.7%, which represents a cut of one and three-tenths.
"The possibility of a departure without a formal agreement is a serious risk to the downside, and a major source of uncertainty. If the United Kingdom leaves the European Union without an agreement, the estimates would be significantly weaker and more volatile, especially in the short term", has alerted the agency to be chaired by mexico's Angel Gurria.
The OECD maintains its projection for 2019 for France (+1.3%) and it dropped a tenth to 2020 (+1,%), while in Germany the adjustment is two and six tenths (+0.5% and +0.6 per cent).
Updated Date: 19 September 2019, 20:00