Published: Tue, March 13, 2018
Money | By Armando Alvarado

OECD upgrades global and Japan growth outlooks for 2018 and 2019

OECD upgrades global and Japan growth outlooks for 2018 and 2019

In its interim economic outlook report issued Tuesday, the organization forecast global economic growth for this year at 3.9 percent, up from its previous suggestion of 3.7 percent.

"Backed by the global trade recovery, minimum wage hike, and household income expansion, South Korea's economic growth will remain at 3 percent in 2018-2019", the OECD report said, retaining its former forecast for Asia's fourth-largest economy.

Rebounding global business investment would keep global trade growth at about 5 percent this year, the OECD forecast.

The OECD's acting chief economist Alvaro Pereira said any trade war resulting from US President Donald Trump's planned import duties on steel and aluminium products, would prove "fairly damaging". In each case, the forecast is up 0.1 of a percentage point. 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.

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"The world economy will continue to strengthen over the next two years", the OECD said. In Germany, growth is seen coming it at 2.4 per cent this year and 2.2 per cent next, up from 2.3 per cent and 1.9 per cent previously. Previously, the OECD had forecast growth of 2.1 percent and 1.9 percent respectively. In its quarterly report, the Paris-based research body said it expects growth to ease off in some of those economies this year, but not by as.

With Britain due to leave the European Union next year, its economic growth was seen easing to 1.1 percent in 2019, unchanged from the OECD's November estimate.

The US economy, by contrast, is seen expanding by 2.9 per cent this year and 2.8 per cent next, helped by the simulative effect of tax cuts.

As the Chancellor prepared to update MPs on the independent Office for Budget Responsibility's latest expectations for growth and borrowing, the OECD predicted the United Kingdom would see the slowest growth among the G20 economies this year, having largely outperformed rivals since the financial crisis.

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