Latest news with #globaleconomy
Daily Mail
12 hours ago
- Business
- Daily Mail
BREAKING NEWS The US is heading for a sharp economic downturn, influential global organization warns
Donald Trump's aggressive trade policies has sent the global economy into a downturn, the OECD warned in a major report on Tuesday. The US economy will be among the hardest hit with growth slowing to 1.6 percent this year down from 2.8 percent in 2024, according to the group's new forecasts. The Paris-based organization also predicted that Trump's tariffs will hit the global economy harder than expected, slashing its growth forecast for the year down to 2.9 percent compared to 3.3 percent last year. The group, made up of the 38 wealthy nations, said that protectionism is also driving up inflation. 'Weakened economic prospects will be felt around the world, with almost no exception,' OECD chief economist Alvaro Pereira said in the report. 'Lower growth and less trade will hit incomes and slow job growth.' The situation could also deteriorate further if countries begin to retaliate against the US with their own steep tariffs, the group warned. Uncertainty from the rapidly changing policies is also hitting consumer confidence and holding back investment, according to the report. The OECD has called on governments to ease trade tensions and work to eliminate uncertainty. 'Agreements to ease trade tensions and lower tariffs and other trade barriers will be instrumental to revive growth and investment and avoid rising prices,' the OECD said. 'This is by far the most important policy priority.' The report comes as its members, including US trade representative Jamieson Greer, prepare to meet in Paris for their annual meeting. The OECD also criticized other key Trump policies including his vast reductions in the federal workforce and curbs on immigration, both of which are also dragging on the economy. The report also warned that the US budget deficit will expand further as weaker economic activity will override the gains made by spending cuts and revenue from tariffs.
Wall Street Journal
16 hours ago
- Business
- Wall Street Journal
World Growth to Slow Amid Trade Turmoil, OECD Warns
The world economy will lose pace this year, hamstrung by uncertainty stemming from a whipsawing U.S. trade policy, according to new forecasts from the Organization for Economic Cooperation and Development. Collectively, the global economy is now set to grow by 2.9% this year and next, the OECD said in its quarterly report released Tuesday. That marks a downgrade to the group's previous forecasts, which saw growth at 3.1% in 2025 and 3% in 2026, and suggests the world economy is set to slow from the 3.3% expansion it booked last year.
Irish Times
17 hours ago
- Business
- Irish Times
Trump's tariffs plunge global economy into slowdown
Donald Trump's trade policies have tipped the world economy into a downturn clouded in heightened uncertainty, with the US among the hardest hit, the OECD said. The Paris-based organisation slashed its global forecasts for the second time this year, citing the impact of the American president's tariff onslaught. The combination of trade barriers and uncertainty are hitting confidence and holding back investment, it said, while also warning that protectionism is adding to inflationary pressures. The OECD now forecasts global economic growth to slow to 2.9 per cent this year from 3.3 per cent in 2024. It expects the rate of expansion in the US will tumble further, to 1.6 per cent from 2.8 per cent – an outlook that is significantly lower than its projection in March. 'Weakened economic prospects will be felt around the world, with almost no exception,' Chief Economist Alvaro Pereira said. 'Lower growth and less trade will hit incomes and slow job growth.' READ MORE The assessment indicates how Trump's policies have become the most pressing problem for the global economy, with no easy solution in sight. The situation could yet be exacerbated by retaliation from US trading partners, a further erosion of confidence, or another bout of repricing on financial markets, the OECD said. The club of 38 rich countries published its forecasts just as its members' ministers convene in Paris for an annual meeting. Top commerce officials are expected there include US trade representative Jamieson Greer and EU trade commissioner Maroš Šefčovič. Lin Feng, a representative from China's Ministry of Commerce, is also scheduled to attend. 'Agreements to ease trade tensions and lower tariffs and other trade barriers will be instrumental to revive growth and investment and avoid rising prices,' the OECD said. 'This is by far the most important policy priority.' Yet the organisation also said that even if Trump reversed course on tariffs, the bonus in terms of growth and reduced inflation would not materialise immediately, due to a persistent drag from heightened uncertainty over policy. For the US, the OECD said curbs on immigration and a sizeable reduction in the federal workforce add to the trade-related drag on the economy. It also cautioned that the budget deficit will expand further as the effect of weaker economic activity will more than offset spending cuts and revenues from tariffs. Inflation in the US will also move higher this year, making it likely that the Federal Reserve will not resume easing policy until 2026, according to the OECD. That process may even be derailed if consumer-price expectations get de-anchored, it added. For other central banks, the OECD also urged continued vigilance. While it expects inflation to ease to their targets in 2026, that process will now take longer, and the pace of price increases may even increase before easing again, it said. Besides the fallout from global trade, the organisation also warned that fiscal risks are intensifying around the world, with 'tremendous' pressures for more spending on defence, climate and ageing populations. It called for governments to reduce non-essential spending and raise revenues by broadening tax bases. – Bloomberg
Bloomberg
4 days ago
- Business
- Bloomberg
Morgan Stanley Sees ‘Uncomfortable' Rally in Emerging Markets
Emerging-market assets should keep rallying for the rest of the year, but gains will likely be limited by a slowing global economy and US policy uncertainty, according to Morgan Stanley. The Wall Street bank is predicting that developing currencies will modestly appreciate against the dollar by year-end while lagging some other G-10 currencies. A gauge of emerging-market currencies is up more than 5% this year, the best performance through May since 2017.
Independent Singapore
6 days ago
- Business
- Independent Singapore
Southeast Asia unites to challenge global giants with bold plan to become 4th-largest economy
KUALA LUMPUR: In an audacious assertion of focus and commitment, the Association of Southeast Asian Nations (ASEAN) revealed an all-encompassing tactical framework intended to alter the 10-nation alliance into the world's fourth-largest economy by 2045. According to a recent Reuters report, the strategy was presented during a high-level conference in Malaysia. The 41-page strategy aims for a more nuanced and insightful economic integration, regulatory coordination, and investment-friendly modifications all over the region. Specifically, the proposal calls for upgraded movement of goods, people, and industries, together with clear-cut governance, viable resource management, and augmented supply chains. Recognising the pressing need to adjust to worldwide shifts, the document recommends that 'business as usual will not suffice' for a region overflowing with possibilities but confronted by internal gaps and inequalities. 'For ASEAN to become the fourth-largest global economy by 2045, countries in the region will need to deepen their economic integration and enhance their agility to address multifaceted challenges,' the plan indicated. See also China's #MeToo movement gets its moment in court Challenges to unity – from geopolitics to climate change Notwithstanding a collective GDP of $3.8 trillion and vigorous advancement across member states — which include Singapore, Indonesia, Vietnam, Thailand, Malaysia, the Philippines, Cambodia, Myanmar, Laos, and Brunei — ASEAN has been grappling with jarring growth, disjointed political structures, and the absence of a unified enforcement for regional undertakings. The five-year plan will confront these age-old impediments with an uncompromising approach, detect major threats to integration such as geopolitical pressures, the growing U.S.-China trade skirmish, digital distraction, demographic changes, and the increasing urgency of climate change. With no fundamental authority to carry out compliance, the strategy sets execution accountability with the ASEAN Economic Community Council, while the ASEAN Secretariat is mandated to take charge of oversight and monitoring. Time for collective action or risk irrelevance Specialists say the coalition must now demonstrate its capacity to act conclusively and with authority, principally with the presence of outside pressures like tariff hostilities and internal divisions over prickly political matters. Tricia Yeoh, Associate Professor of Practice at the University of Nottingham Malaysia, highlighted the value of unity in action. 'ASEAN needs to demonstrate efficacy for it to remain relevant,' Yeoh said. 'If they can't even achieve negotiating over Myanmar or the code of conduct with China on the maritime issue, people will question ASEAN's purpose.' Yeoh also stressed the necessity of ASEAN countries to prioritise regional consultations and dialogues over individual two-pronged arrangements, warning that fragmented initiatives could undermine the bloc's bargaining authority and tactical significance. With this new master plan, ASEAN has the chance to swing from goal to implementation; however, victory will be contingent on its members' capacity to deal with their incompatibilities, handle their disputes, and commit to an enlightened, evolving, and adaptive future.
