Global growth to accelerate, but risks loom large, OECD warns

World economic growth would continue accelerating next year but multiple dark clouds loomed large on the horizon, one of the rich-world's economic watchdogs cautioned.

Global gross domestic product would expand by 3.6% in 2018 after growth of 3.3% in 2017, the Organisation for Economic Cooperation and Development forecast, but amid risks from increased protectionism, financial weaknesses and the possibility of volatility in financial markets which had become disconnected from real activity.

Inequality was still rife, too.

Commenting on the Outlook, OECD Secretary-General Angel Gurría said: "Growth is still too weak and its benefits too narrowly focused to make a real difference to those who have been hit hard by the crisis and who are being left behind. Now, more than ever, governments need to take actions that restore people’s confidence while at the same time resisting turning inwards or rolling back many of the advances that have been achieved through greater international cooperation."

On a brighter note, continued initiatives on government spending and structural reforms on the part of several major economies - including China, Canada and the US - would deliver a boost to private demand globally and reduce inequality, the Paris-based OECD said.

US GDP growth will accelerate from 2.4% in 2017 to 2.8% in 2018, the OECD predicted, while in the single currency bloc it would clock in at 1.6% for ech of those years.

A slight acceleration in Japanese GDP from 1.0% in 2016 to 1.2% in 2017 is anticipated, even as China's economy slows to a 6.5% clip in 2017 and 6.3% in 2018.

The fiscal stance in the euro area had also turned "slightly more" expansionary, although more ambition would be welcome on this front.

Nonetheless, growth around the world remained "sub-par", the OECD said in its Interim Economic Outlook.

High levels of indebtedness were a key risk for a number of emerging markets, while some advanced economies would be well-advised to keep one eye on housing valuations.

There was also scope for tensions in international capital markets as interest rates adjusted, diverging across the major economies.