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Global economy slows to decade low: OECD

Trade conflict, weak business investment, persistent political uncertainty flagged as causes

US President Donald Trump poses for a photo with Chinese President Xi Jinping.

US President Donald Trump poses for a photo with Chinese President Xi Jinping. (AP photo)

TAIPEI (Taiwan News) — The global economy is expected to grow at 2.9 percent for the rest of 2019 and 2020, the lowest since the financial crisis 10 years ago, according to an OECD forecast on Thursday (Nov. 21).

The Paris-based policy forum provided its gloomy outlook in a statement, citing trade conflict, weak business investment, and persistent political uncertainty. These alarming factors combined could increase the odds of long-term stagnation, it warned.

The world's GDP is projected to expand by 3 percent in 2021, with lackluster performances seen both in advanced and emerging markets, said the OECD. The U.S. is expected to slow to 2 percent growth in 2020 and 2021, and Japan and the euro area are forecast to grow at around 1 percent, while China’s GDP may decelerate to 5.5 percent in 2021 from 6.6 percent last year.

Government action is required to address economic uncertainties, including measures to support the transition to cleaner energy and a more digital world. “We are heading for a long-term future of low growth and declining living standards,” unless countries expand investment, face up to the challenges of our time, and follow a rules-based trading mechanism, said OECD Secretary-General José Gurría in Beijing.

In addition to the dragging trade conflict between the U.S. and China that the OECD warned could disrupt supply chains and affect jobs and incomes, the organization also pointed to the unpredictable future of the EU-UK trade relationship and high corporate debt as factors that could hurt the global economic outlook.