According to the latest forecasts from the Organization for Economic Cooperation and Development, the global economy will continue to slow down in 2019, amid prolonged trade disputes and rising interest rates. But the Paris-based group doesn't see a recession on the horizon.
Global growth will slow from an estimated 3.7 percent this year to 3.5 percent in 2019 and 2020, down from a previous forecast of 3.7 percent for 2019. The slowdown is expected to hit hardest in developing economies, as rising interest rates dampen in investment in continues like Brazil, Russia, Turkey and South Africa.
"We're returning to the long-term trend. We're not expecting a hard landing, however, there's a lot of risks. A soft landing is always difficult," the OECD's chief economist, Laurence Boone, told Reuters.
Trade flows between the U.S. and China have slowed after a tit-for-tat escalation in tariffs by Washington and Beijing. The stalled Brexit negotiations over Great Britain's looming departure from the European Union have also raised uncertainty about the impact on trade flows between the EU and U.K.
Cnbc.com reports how growth prospects for Europe weakened from the September forecast, down four-tenths of a percent to 1.6 percent in 2020, despite efforts by European central bankers to boost growth with low interest rates. In addition to worries about the impact of the U.K.'s Brexit, Europe's economy faces a deeper-than-expected slowdown in Italy. Italian growth is pegged at only 1.0 percent this year, slowing to 0.9 percent in 2019 and 2020.