Trump’s policies could boost U.S. and global economic growth - OECD

In its latest global economic outlook, the Paris-based Organization for Economic Cooperation and Development (OECD) on Monday published its new global outlook containing analysis and projections for its 35 member countries and other major economies.

The thinktank in its latest forecast has warned that the world economy will struggle to escape its long period of low growth unless governments take advantage of low interest rates to invest more. The OECD called for more fiscal stimulus from governments than now planned, since that would further boost global growth.

“Almost a decade after the outbreak of the financial crisis, the global economy remains in a low-growth trap with weak investment, trade, productivity and wage growth and rising inequality in some countries,” said Catherine Mann, the OECD’s chief economist.

In its first forecasts since Trump's victory, the thinktank warned that a new wave of protectionism and trade tensions risks denting global growth, stoking inflation and harming living standards. It said that increases in spending and tax cuts promised by President-elect Donald Trump could boost U.S. and global economic growth.

The thinktank expects fiscal stimulus from the early months of Trump's presidency would boost U.S. economic growth to 2.3 percent from 1.9 percent in 2017, and to 3 percent from 2.2 percent in 2018. It noted that as U.S. demand for imports rises, other parts of the world would also be benefited. It forecasts that after averaging 3.9 percent growth over the decade to 2013, global growth would be 2.9 percent for this year then edge up to 3.3 percent in 2017 and 3.6 percent in 2018.