FAST FIVE: OECD Slashes Global Growth Outlook, Warns Germany Already In Recession
OECD Slashes Global Growth Outlook, Warns Germany Already In Recession In one of the most downbeat forecasts on the global economy that we've seen so far this year, the Paris-based organization of wealthy nations known as the OECD – the Organization for Economic Cooperation and Development – warned that the global economy is heading toward a recession, and that governments aren't doing enough in terms of fiscal stimulus to try and boost the economy.
The advocacy for fiscal stimulus follows reports that Germany is considering a “shadow budget” to bolster public investment as Europe's economy slides.
But the OECD warned that “persistent weakness” in industry will ultimately weigh on the labor market, dragging down household incomes and spending.
Not knowing whether the next Presidential tweet will ease or exacerbate tensions makes for an environment of extreme uncertainty, pushing businesses to turn cautious on investment and hiring, and households to switch from spending to saving.
“Trump's brinkmanship on trade with China has left consumers, businesses and financial markets on edge.” The OECD said “collective effort is urgent,” and the effectiveness of monetary policy could be enhanced by “stronger fiscal and structural policy support.” According to CNBC, the OECD's lower forecast for the EU was largely due to the slowdown in the bloc's biggest economy, Germany, which was forecast to already be in a technical recession.