OECD Ups Global Growth Projection, Warns On Trump Steel Tariffs

PARIS (Alliance News) - The Organisation for Economic Cooperation and Development on Tuesday ...

Alliance News 13 March, 2018 | 2:37PM
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PARIS (Alliance News) - The Organisation for Economic Cooperation and Development on Tuesday raised its projection for global economic growth in 2018 from 3.7% to 3.9%.

In an interim review of its six-monthly world economic outlook from November, it also upped its projected global growth rate for 2019, from 3.6% to 3.9%.

New tax reductions and spending increases in the US and additional fiscal stimulus in Germany were key factors behind the revision, the Paris-based think tank said.

"Stronger investment, the rebound in global trade and higher employment are helping to make the recovery increasingly broad-based," the organization said.

It sounded a warning note on US President Donald Trump's recent decision to levy new tariffs on steel and aluminium imports, though without explicitly citing the move.

"Safeguarding the rules-based international trading system will help to support growth and jobs," the organization wrote.

"Governments should avoid escalation and rely on global solutions to resolve excess capacity in the global steel industry."

The OECD said medium-term growth prospects were still much weaker than before the 2008 financial crisis, reflecting "less favourable demographic trends and a decade of sub-par investment and productivity."

The organization had announced in December that unemployment rates in its 35 mainly wealthy member states had for the first time dropped back to their level before the 2008 crisis.

But it noted on Tuesday that the recovery in employment remained uneven, with employment rates for over-55s growing sharply but younger age groups only at or below pre-crisis levels.

"Labour markets have become more polarised, with a decline in the share of middle-skill jobs relative to jobs with higher or lower skill levels," the think tank said.

"Many households have seen little growth in real disposable income over the past decade, particularly those with low incomes."

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