OECD predicts slowest global growth since GFC

The OECD warned on Thursday that the global economy was set to witness its weakest growth since the global financial crisis of 2008-2009, slowing from 3.6% in 2018 to 2.9% in 2019. It also predicted growth of just 3.0% in 2020.

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.

The OECD said the revisions to its estimates were the result of what appeared to be temporary trade tensions becoming a long-lasting new state of relationship between superpowers.

Trade growth, which had been at the forefront of the global recovery following the crisis fell from 5% in 2017 into negative territory as trade tensions also weighed on business confidence, lowering investment growth from 4% in 2017 to just 1%.

The OECD predicted the US economy will grow 2.4% in 2019 and 2.0% in 2020, instead of the 2.8% and 2.3%, respectively, it had forecast earlier in the year.

China was also set to suffer as the second-biggest economy was predicted to grow 6.1% in 2019 and 5.7% in 2020, down from the OECD estimates of 6.2% and 6.0% in May.

The OECD also issued a dire warning for the UK, forecasting British growth of 1% in 2019 and of 0.9% in 2020 if Britain manages to leave the EU smoothly with a transition period, but if Britain left without a deal, then the economy was said to be on track to grow at 2% lower pace than otherwise expected.

Euro zone growth was seen at 1.0% - down from 1.2% in May.