OECD Sees Better Outlook, if Trade Escalation Avoided

OECD forecasts for growth in 2018 and 2019

OECD forecasts for growth in 2018 and 2019

An improved outlook for world economic growth will be placed at severe risk if a trade war results from U.S. metal tariffs, a report has warned.

The Organisation for Economic Co-operation and Development has lifted its forecasts for global growth from 3.7 and 3.6 per cent to 3.9 per cent in both 2018 and 2019.

It credited tax cuts in the U.S., the world's largest economy, for much of the upgrade - though the worldwide forum warned that protectionist policies were a big risk factor in the forecast.

The OECD's acting chief economist said any trade war resulting from US President Donald Trump's planned import duties on steel and aluminium products, would prove "fairly damaging".

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.

It said the eurozone would also grow by more than originally expected - at a rate of 2.3%.

As downside risks, the report cited persisting gestures of trade protectionism, the normalization of monetary policies in key countries, demographic changes and a decrease in mid- and long-term investment.

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

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