OECD projects further weakening in global economy

ANKARA

The Organization for Economic Cooperation and Development (OECD) on Thursday lowered its global growth forecast for 2019 due to trade hostilities, policy uncertainties, and lower investments.

The world economic growth rate is expected to stand below 3% this year, and stay weak next year, the OECD said.

"The OECD projects that the global economy will grow by 2.9% in 2019 and 3% in 2020 -- the weakest annual growth rates since the financial crisis, with downside risks continuing to mount," it said.

Previously in May 2018, the organization projected the world growth rate to be around 4%. It now said the outlook is weakening for both advanced and emerging markets.

It highlighted that the trade conflict between the U.S. and China is entrenching high levels of uncertainty.

Substantial uncertainty persists about the timing and nature of the withdrawal of the U.K. from the EU, particularly as concerns a possible no-deal exit on Oct. 31 which could push the UK into recession in 2020 and lead to sectoral disruptions in Europe, it said.

The OECD revised up its projection for the Turkish economy in 2019. It projected Turkey's economy would contract 0.3% this year and grow 1.6% next year.

Noting that Turkey's GDP in the first half of 2019 was stronger than expectations helped by temporary fiscal and quasi-fiscal spending, and strong tourism exports, the OECD said:

"However, investment continues to contract and credit growth is still weak."

It noted that monetary policy easing should help growth to pick up modestly to just over 1.5% in 2020, provided domestic and international confidence is maintained.