The growth of the world economy will be only about 3.3% in 2019 because of trade tensions and political uncertainties, provides for the OECD, which forecast 3.5% in November, in its latest report published on Wednesday. The Organization of economic cooperation and development, explains this new brake by “the rise of political uncertainties, trade tensions persisted, and a continuous decrease in the confidence of businesses and consumers.” The growth has been revised downwards in almost all G20 economies, in particular for the euro area where it would be limited to 1% from 1.8% projected in the previous quarter. For 2020, the growth of the euro area is expected to be 1.2%, which is also a shot of a plane of 0.4 percentage point compared to the last forecast. Within the euro area, the slowdown was particularly brutal this year for Germany (0.9 percentage points to 0.7%) and Italy (1.1 percentage points to 0.2%). France is a lot better (- 0.3 point to 1.3%) because its economy is less export-dependent.
Brexit hard
An “external demand weaker and a lesser confidence are likely to weigh on investment,” while “the increase in wages and macroeconomic policy accommodative will support household consumption” in the euro area, according to the OECD. For the organization, the “euro area governments should make efforts coordinated on plans for fiscal and structural”, that is to say, cut taxes to support demand in countries with sound public finances and liberalise their markets, especially in services, to increase productivity.
The United Kingdom sees its anticipated growth reduced to 0.8%, against 1.4% previously expected. But it is still without counting with the effects of a “Brexit” without agreement, a prospect more and more real as we approach the 29th of march, date of departure from the EU. The OECD stresses that “if the United Kingdom and the european Union were to be separated without agreement, the outlook would be significantly weaker” for Great Britain: its gross domestic product (GDP) would be reduced by 2% over the next two years, by the effect of the application of customs duties of the world trade Organization (WTO).
Risk chinese
as a Result of the tariffs adopted in particular by the United States, the world trade has already “slowed sharply”, and “new orders measured in many countries continue to decline”, note even the OECD. Previously, the only barriers erected in 2018 “weigh on growth, investment and living standards, especially for low-income households”. The organization also stresses that the activity planetary is particularly exposed to a slowdown would be more pronounced than expected in China, where it projects a growth of 6.2% this year (compared to 6.3% last November) and 6.0% in 2020 (unchanged). “Trade tensions are weighing increasingly on exports and industrial production” in the world’s second largest economy, notes the OECD.
The organization has simulated the effect that would have on the global economy, a slowdown in chinese more than expected: a fall of two percentage points of the GDP growth in China amputerait the global growth of 0.4 of a percentage point. Japan, other east Asian countries, producers of raw materials, as well as Germany would be particularly affected. India, whose growth is expected to cavort to 7.3% this year, Indonesia (5.2%) and South Africa (1.7 per cent) are not the subject of a revision compared to the autumn forecast, while Argentina remains in recession, but with a perspective a little less dark (-1,5% compared to -1,9%). Finally, the brazilian economy is expected to see its recovery and will accelerate to 1.9% in 2019 and then to 2.4% in 2020, after only 1.1% in the last year.
