OECD raises GDP forecast for Poland

The Organisation for Economic Co-operation and Development stood by its economic forecasts for United Kingdom gross domestic product (GDP), predicting it to slow from 1.8% to 1.6% this year.

The OECD also warned that a growing backlash against globalization could trigger protectionist policies and undermine global trade, leading to lower growth.

But the OECD said higher interest rates alone will not be enough to address high house prices and household debt.

Global growth is set to improve this year with the world economy likely to expand at the fastest pace in six years and the momentum is expected to continue, but more efforts are needed to ensure that benefits of such expansion and globalization are more widely shared, the Organisation for Economic Co-operation and Development said on Wednesday.

"Higher uncertainty could hamper domestic and foreign investment more than projected, but swift progress in negotiations and an outcome that retains strong trade linkages with the European Union would lead to better outcomes than projected", the OECD said.

It said the modest growth is supported by an upturn in exports, which have been on a roll since November a year ago on the back of brisk overseas sales of semiconductors.

The Paris-based organisation nudged up its forecasts for global growth this year.

Sterling's slump since the Brexit vote has bumped up the cost of living as manufacturers and retailers pass down rising import prices to consumers.

Labour market figures published by the Office for National Statistics last month for January to March showed unemployment fell by 53,000 to 1.54 million - a rate of 4.6% - the lowest since summer 1975.

Inflation hit its highest level in almost four years in April at 2.7 per cent, as the Brexit-hit pound, electricity price hikes and rising air fares tightened the squeeze on household spending.

"Given continuing regional geo-political tensions, and prior to general elections in 2019, growth is projected to edge up to around 3.5 percent in 2017 and 2018", the report read.

"Trade and manufacturing output growth have picked up from a very low level, helped by firmer domestic demand growth in Asia and Europe, and private sector confidence has strengthened".

  • Zachary Reyes