INSUBCONTINENT EXCLUSIVE:
rather than just hoping for a cyclical upswing, the OECD said.
The latest outlook and policy prescriptions from the Paris-based group mark a
step beyond its repeated warnings about threats to growth from US-China tensions, weak investment and trade flows
Those remain, but it also flags more systemic challenges from climate change, technology and the fact that the trade war is just part of a
bigger shift in the global order.
For OECD Chief Economist Laurence Boone, the worry is that the world could continue to suffer in the
markets, where investors are increasingly betting on an upswing next year depending on the latest twists in trade talks.
Morgan Stanley sees
a pickup in global growth from early next year, though risks are still skewed to the downside, while Goldman Sachs says better trade policy
news recently means the drag on world growth should ease.
The OECD sees global growth stuck at 2.9 per cent this year and next, and rising
slightly to 3 per cent in 2021
It lowered its 2019 US forecast to 2.3 per cent from 2.4 per cent previously, and left 2020 at 2 per cent.
On trade, the OECD said the risk
That would weigh on business investment growth in major advanced economies, which the OECD expects to slow to about 1.25 per cent a year
from close to 2 per cent in 2018.
The entrenched trade and investment challenges mean governments must make deeper changes beyond simply
rolling back tariffs of the last two years
This could mean updating global rules and reducing subsidies with harmful effects on trade, the OECD said.
It urged a similarly profound
rethink of environmental policies amid bushfires in Australia and flooding in Venice that some have linked to climate change
economy, how governments regulate and respond is also having an impact
said.
While fiscal stimulus could provide a short-term boost, the OECD said the focus should be on the long term, such as through dedicated
