The OECD forecasts global economic growth of 3.5% in 2017, which would be the global economy’s best performance since 2011, and expects global economic growth to edge up slightly next year to 3.6%.
The think tank increased its global economic growth forecast for this year by 0.2% from its previous estimate of 3.3% growth.
However, OECD secretary general, Angel Gurria, said:
“Everything is relative. What I would not like us to do is celebrate the fact we’re moving from very bad to mediocre.
“It doesn’t mean that we have to get used to it or live with it. We have to continue to strive to do better.”
The OECD predicts US growth of 2.1% this year and 2.4% in 2018, down from its previous forecast of a 2.4% increase in US growth this year and 2.8% for 2018.
UK economic growth forecast to slow this year and in 2018
The OECD expects Britain’s economy to slow this year and in 2018 over uncertainty surrounding the outcome of Brexit negotiations.
The think tank said that the uncertainty of the UK leaving the EU is projected “to undermine spending, in particular investment”.
The OECD estimates UK economic growth of 1.6% this year, followed by growth of just 1% in 2018 – unchanged from its previous estimate.
If the UK does not manage to secure a comprehensive free trade agreement with the EU when it leaves the bloc then it would have to trade on World Trade Organisation terms.
“Policies have supported private confidence and consumption, but household spending is projected to ease as the combination of a weakening labour market and higher inflation reduces real wage growth,” it said.
Households are expected to spend less because of weak wage growth and higher inflation.
“Households are expected to continue to support their consumption by further reducing their saving rate.
“Business investment is projected to contract amid the large uncertainty and because of lower corporate margins,” the think tank said.
However, the OECD did note that “swift progress in negotiations and an outcome that retains strong trade linkages with the European Union would lead to better outcomes than projected”.