OECD: Trade Disputes Are Weakening Future Growth
May 21 2019 - 6:50AM
Dow Jones News
By WSJ City
Conflicts between the US and its major trade partners have
weakened business investment around the world, threatening to
hamper future as well as current rates of economic growth, the
Organization for Economic Cooperation and Development said on
Tuesday.
"It's something that's super worrying. The less we invest today,
the more we will be missing in the future." Laurence Boone, the
OECD's chief economist.
KEY FACTS
-- The OECD said tariffs have been largely responsible for a slowdown in
global growth since 2017.
-- It warned that uncertainty about the extent and duration of trade
disputes is holding back business investment.
-- That's harming longer-term growth prospects.
-- The OECD estimates global business investment will grow at an average
rate of 1.75% this year and next.
-- That's down from 3.5% in 2017 and 2018.
-- It said lower spending on tools and equipment is contributing to a
slowdown in trade flows.
Expectations
The OECD slightly raised its growth projections for the US,
eurozone and the UK. It left its figures for China unchanged, and
lowered its projections for Japan. But those forecasts were
finalised before the US raised tariffs on $200bn of Chinese goods
to 25% from 10%.
The OECD said that, if kept in place, those new tariffs would
shrink the US and Chinese economies by 0.2% or 0.3% by 2021, while
U.S. consumer prices would be 0.3% higher in 2020 than they would
have been without the new duties. It said further tariff increases
would deepen the damage.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
May 21, 2019 06:35 ET (10:35 GMT)
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