OECD cuts global growth forecast

Paris: The OECD on Tuesday cut its forecast for the world economy, urging governments to resolve their trade disputes as the latest flare-up in the China-US trade war threatens to crimp global growth.

"Governments must act urgently to reinvigorate growth that benefits all," the Organisation for Economic Co-operation and Development said as it pared back its forecast for global growth to 3.2 percent this year from 3.3 percent earlier. "Resolve trade disputes through increased international cooperation while fixing the international rules-based system," the OECD said. "Invest in infrastructure, digital transformation and skills to meet tomorrow´s challenges. In the euro area, combine structural with fiscal policies to stimulate activity."

The OECD´s updated forecasts did not take directly into account the latest flare-up in the long-running trade war between Washington and Beijing, "insofar that there is still a great deal of uncertainty about the length of time (tariffs) will remain in place and the future evolution of the trade relationship between the two countries," an OECD source told AFP. Nevertheless, the projections did "incorporate" the increased uncertainty generated by the trade tensions, the source said.

As both Washington and Beijing slap trade tariffs on more and more of each other´s goods, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security.