United Kingdom growth weakest in G20 as world economy strengthens, OECD says

OECD urges world to play by trade rules as tariff row rages

OECD urges world to play by trade rules as tariff row rages

The OECD's latest Interim Economic Outlook has revised South Africa's growth rate expectations for 2018 and 2019 upward, on the back of positive sentiment around the economy and changes to the political landscape.

An improved outlook for world economic growth will be placed at severe risk if a trade war results from United States metal tariffs, a respected global forum has warned.

Britain, however, was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 per cent this year, although up from a November forecast of 1.2 per cent due to the broader global improvement.

Japan's growth pace is set to remain at around 1.5 percent in 2018 before easing to around 1 percent in 2019, supported by improved export growth, especially in Asian markets, and the additional spending announced in the recent supplementary budget, OECD said.

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

U.S. economic growth is tipped for a rise from 2017's 2.3% to 2.9% this year and 2.8% in 2019, on the back of tax cuts and spending increases under President Donald Trump.

The global economy will see its strongest growth in seven years in 2018 thanks to a rebound in trade and. Slow growth in the wage base poses a challenge to policymakers trying to inject further momentum into an economy now in its best run of expansion in 28 years.

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"Safeguarding the rules-based global trading system is essential to prevent the longer-term harm to growth prospects that could arise from a retreat from open markets", it said.

The raised forecast was in part due to expectations that USA tax cuts would boost the world's biggest economy, it said.

Globally, the OECD expects a modest increase in inflation amid tightening labor markets, which will reduce dependence on accommodative monetary policy.

Among other hot economies, stronger growth in France and Germany boosted the outlook for the broader euro zone to 2.3 per cent for this year and 2.1 per cent in 2019.

The United Kingdom will be the country of the G20 with the lowest growth both this year (1.3%) and the next (1.1%) and the reason, according to Pereira, is "mostly due to the uncertainty of the Brexit".

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

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