OECD has announced cuts in global growth forecasts, with the blame falling on the continuing US-China trade war. The Paris-based policy forum has released its most recent updates to its estimates, with figures slashed since its last report, in May 2019.
“What looked like temporary trade tensions are turning into a long-lasting new state of trade relationships,” OECD chief economist Laurence Boone told Reuters.
Trade growth, which had been the primary source of economic growth, has turned negative. This has led to a reduction in growth around the world. If you’re risk averse, looking for portfolio diversity or searching for a more stable investment prospect, gold is once again the frontrunner.
Both the US and China are feeling the effects of the tensions, with US growth cut from 2.8% to 2.4%, and Chinese growth from 6.2% to 6.1%.
Separately, ongoing uncertainty around Brexit is having similar effects in the EU. In the event of a no-deal Brexit, Britain and its trade partners in Europe all stand to lose.
“If Britain leaves without a deal, its economy will be 2% lower than in 2020-2021 even if its exit is relatively smooth with fully operational infrastructure in place,” the OECD said.
In this event, the EU would see its gross domestic product cut by half a percentage point over 2020-2021.
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