S. Korea to maintain 3% growth for 2018-2019: OECD

OECD urges world to play by trade rules as tariff row rages

OECD urges world to play by trade rules as tariff row rages

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.

The OECD's latest Interim Economic Outlook has revised South Africa's growth rate expectations for 2018 and 2019 upward, on the back of positive sentiment around the economy and changes to the political landscape.

While broadly more optimistic than only a few months ago, the Organisation for Economic Cooperation and Development warned a trade war could threaten the outlook, and forecast that United Kingdom growth would lag all G20 countries due to Brexit uncertainties.

The latest report lifted growth forecasts for the USA and eurozone economies.

Britain was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 percent this year.

Alvaro Pereira, the OECD's acting chief economist, said: "US steel and aluminium tariffs will raise costs and harm consumers, while not solving the global overcapacity problem".

It credited tax cuts in the U.S., the world's largest economy, for much of the upgrade - though the global forum warned that protectionist policies were a big risk factor in the forecast.

Rebounding global business investment would keep global trade growth at about 5 percent this year, the OECD forecast.

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's up from 3.7 per cent and 3.6 per cent respectively compared with its November projections. The Paris-based organization had expected growth to be 1.2 percent in 2018 and 1.0 percent in 2019.

With the euro area economy resilient, rising inflation would allow the European Central Bank to reduce its bond purchases gradually this year and subsequently phase out its negative interest rate policy, the OECD said.

"Countries should rely on collective solutions like the Global Forum on Steel Excess Capacity to address specific issues".

National Treasury now anticipates growth of 1.5% in 2018, rising to 2.1% in 2020.

"Trade protectionism remains a key risk that would negatively affect confidence, investment and jobs", it said on Tuesday.

Latest News