Paris (AFP)
Commercial war, Brexit, Chinese slowdown and deteriorating private debt: risks accumulate for the global economy to the point where the OECD is now expecting the weakest growth since the 2008/2009 financial crisis and is calling for States to react.
Global growth is expected to fall below 3% this year to 2.9%, 0.3 percentage point lower than in the latest May forecast, and is expected to remain virtually stable at 3% in 2020 (-0.0%). 4), estimated the Paris-based institution in its updated forecasts released Thursday.
The Organization for Economic Co-operation and Development (OECD), which reviews its figures four times a year, now expects global growth to be "the lowest since the financial crisis" when it fell to 2.9% in 2008 before plunging to -0.5% the following year.
In the eyes of the OECD, which could not take into account in its calculations the recent attack on Saudi oil facilities, the current situation in the Middle East is nevertheless an additional uncertainty on an already long list.
"Trade and political tensions fuel the risk of prolonged slow growth," she said, fearing escalating reprisals in the US-China trade war and a Brexit without a deal that "would bring blow to an already fragile British economy and would have disruptive effects in Europe ".
The institution also fears "the extent of private debt, whose quality is deteriorating (and which) could amplify the effects of possible shocks".
- Budget stimulus?
Faced with this situation, the OECD once again calls, without naming names, for states to "stop the rise of tariffs and subsidies that distort trade" and "restore predictable rules for companies ".
The OECD also recommends that governments "limit the reliance on excessively stressed monetary policy" at a time when the European and American central banks have returned to a policy of support for the economy.
States now "to engage in public investment" to "get out of the trap of persistent low growth," said the OECD, an umpteenth foot call to countries with fiscal space, such as Germany.
Europe's largest economy has experienced one of the most severe corrections by the OECD, which is only expecting 0.5% growth this year (-0.2 points) and barely better. next year to 0.6%, half less than expected in the latest forecast in May.
If Italy is not expected to grow in 2019 and slightly rebound next year by 0.4% in 2020 (-0.2 point compared to the May forecast), France should do better than its two main partners in the economy. euro zone with growth of 1.3% in 2019 (unchanged) and 1.2% in 2020 (-0.1).
The British economy, in full uncertainty on the Brexit, is expected to grow at a rate of 1% (-0.2 point compared to the latest forecast) this year and fall to 0.9% next year ( -0.1).
The United States, which has one of the longest growth cycles in its history, is expected to slow to 2.4% this year (-0.4 point from the May forecast) and then fall back to 2 % in 2020 (-0.3 points).
As for China, expected by the OECD at 6.1% this year (-0.1 points), it should further decline and fall below the symbolic 6% next year at 5.7%.
In this gloomy context, the institution has mainly cut in its forecasts for emerging countries, slashing especially that for India from 1.3 point to 5.9% this year and 1.1 point that for 2020 to 6 , 3%.
The most critical situation is that of Argentina, in the midst of economic and financial turmoil, which should experience an aggravated situation this year, with a recession of 2.7%, then a further decline of 1.8% of its GDP. next year.
© 2019 AFP