Business Brexit

Saturday 10 December 2016

Trump plans 'good for the world economy', OECD claims

Published 29/11/2016 | 02:30

Donald Trump. Photo: Reuters
Donald Trump. Photo: Reuters

Britain's vote to leave the European Union won't have as bad an effect as predicted and Donald Trump could be good for the world economy.

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That's according to one of the world's most influential economic think tanks. The Organisation for Economic Cooperation and Development (OECD), a group that tries to coordinate the economic policies of rich countries, has revised up its growth prospects for Britain for this year, from 1.8pc to 2pc, and to 1.2pc for next year from 1pc. It said weak sterling was boosting UK growth.

"Monetary policy has mitigated the immediate impact of the shock by stabilising financial markets and shoring up consumer confidence," the OECD said, in its latest global economic outlook.

But it warned that its assessment assumed that the UK would operate with a so-called most-favoured-nation status after 2019, and continue trading with the European Union.

"But there is considerable uncertainty about this, which will increasingly weigh on growth and, in particular, private investment - including foreign direct investment," the OECD report said.

Meanwhile, globally, the OECD said global growth would pick up faster than previously expected as the US economy was boosted by the Donald Trump administration's planned tax cuts and increase in public-spending. It thinks global growth would accelerate from 2.9pc this year to 3.3pc in 2017 and reach 3.6pc in 2018.

In a surprise move, the OECD effectively backed Mr Trump's plan to boost infrastructure spending, saying it would combat inequality. "The projected fiscal stimulus will go some way to reversing the marked slowdown in spending on public infrastructure," it said.

Irish Independent

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