OECD slashes global growth forecasts and warns of no-deal Brexit recession


The OECD said that uncertainty around Brexit had already depressed business investment

Global growth predictions were slashed today as a major economic body warned that a no-deal Brexit would see Britain return to recession.

The Organisation for Economic Cooperation and Development (OECD) cut predictions for the UK’s growth to 0.8 per cent in 2019 and 0.9 per cent in 2020.


Read moreEU faces the biggest risks from no-deal Brexit, says Carney

The organisation, which comprises 36 of the world’s wealthiest countries, had predicted growth rates of 1.4 per cent in 2019 and 1.1 per cent in 2020 for Britain in November.

The economy could contract by two per cent, plunging the country into recession, if Britain quits the EU without a deal and crashes out on World Trade Organisation (WTO) rules, the OECD also warned.

Such an outcome, according to the report, “would add to the adverse effects on GDP and business investment already seen relative to expectations prior to the vote in 2016”.

The OECD cautioned that the effects of no-deal “could be stronger still if a lack of adequate border infrastructure and a loss of access to EU trade arrangements with third countries were to cause serious bottlenecks in integrated cross-border supply chains”.

Britain’s downgrade comes as part of a general reduction in growth forecasts for OECD countries, with Eurozone countries in particular struggling.

Germany had its growth forecast slashed by over half to just 0.7 per cent for 2019. In November, its economy had been predicted to grow 1.6 per cent in 2019.

Italy’s economy is set to contract by 0.2 per cent in 2019, according to the OECD, which predicted France’s economy to grow 1.3 per cent in 2019.

Read moreEurozone construction rebounds led by German recovery in February

“The global economy is facing increasingly serious headwinds”, the OECD chief economist Laurence Boone said.

“Governments should intensify multilateral dialogue to limit risks and coordinate policy actions to avoid a further downturn.”

Published by technofiend1

Kazan- Kazan National Research Technical University Казанский национальный исследовательский технический университет имени А. Н. Туполева he graduated in Economics in 1982

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