$470 billion trade war looms over OECD's optimistic global outlook

Steel exporters face import duties of 25pc in the US

Steel exporters face import duties of 25pc in the US

Trade tensions are threatening the best global economic growth outlook in seven years, the OECD said on Tuesday, adding that four USA rate rises are likely this year as tax cuts stoke the world's biggest economy while Brexit will drag on Britain.

Global economic growth accelerated previous year as higher investment and falling unemployment drove pickups in most major economies.

On its latest forecasts, the OECD said "stronger investment, the rebound in global trade and higher employment are helping to make the recovery increasingly broad-based".

OECD Acting Chief Economist Alvaro Pereira observed: "In this environment, an escalation of trade tensions would be damaging for growth and jobs".

As downside risks, the report cited persisting gestures of trade protectionism, the normalization of monetary policies in key countries, demographic changes and a decrease in mid- and long-term investment.

U.S. President Donald Trump last week formally signed proclamations to impose a 25-percent tariff on imported steel and a 10-percent tariff on aluminum, causing mounting dissent among business groups and trading partners around the world.




The world's largest economy is expected to grow 2.9 percent this year and 2.8 percent next year.

Britain is set to miss out on buoyant global economic growth over the next two years, according to new forecasts by the Organisation for Economic Co-Operation and Development (OECD).

For South Africa, the OECD has revised the expected GDP growth rate upward to 1.9% in 2018, and 2.1% in 2019 - higher than the growth rate now targeted by National Treasury. That was higher from a November forecast of 1.2 percent due to the broader global improvement.

And while eurozone growth is expected to ease off from 2.5% a year ago to 2.3% in 2018 and 2.1% in 2019, major continental economies like Germany and France are forecast to out-perform the UK.

Last week, Stats SA reported higher than expected GDP growth for South Africa in 2017, showing that the economy grew by 1.3%, exceeding National Treasury's expectation of 1.0%. "Governments of steel-producing economies should avoid escalation and rely on global solutions".

The report revised 0.4% higher its predictions for United States growth - hitting 2.9% this year.

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