On November 21, 2019, the Paris-based research group the Organization for Economic Co-operation and Development issued a major warning statement. The Headline from the News Release was ‘Weak Trade and Investment Threaten Long-Term Growth.
The OECD revised its global growth estimates down accordingly. For the U.S., the growth in 2019 will be 2.3%, down from 3.0% in 2018. Rates for 2020 and 2021 were revised down to 2.0% for each year.
Global growth of 3.5% in 2018 is now expected to decline to 2.9% in 2019 and 2020, before ticking up to 3.0% in 2021.
Growth rates in China are now expected to drop dramatically from 6.6% in 2018, to 6.2% in 2019 and 5.7% in 2020.
The trade and tariff disputes are the main cause of the expected growth slowdown and the OCED used strong language to warn about the ‘risk of long-term stagnation’ across all the major economic regions of the world.
The OCED is recognized by most political and economic leaders as an unbiased group whose predictions are fact-based and not influenced by political factors. Along with the IMF and the World Bank, the OECD provides frequent economic updates and projections which are held in the highest regard. Investors need to remain current with the OECD findings and conclusions as one way to stay on top of global economic conditions influencing the securities markets.