OECD maintains growth outlook for Korea at 3%


The OECD raised its growth projection for the United States from 2.5 percent to 2.9 percent.

The OECD predicted global GDP growth would increase to 3.9% in 2018 from 3.7% in 2017, which was the strongest performance since 2011. That was higher from a November forecast of 1.2 percent due to the broader global improvement. China was seen growing 6.9% in 2017 and by 6.7% in 2018 and 6.4% in 2019.

The warning comes as many countries including the European Union and Japan try to get exemptions from the US on the metals tariffs amid threats of retaliatory measures against the world's largest economy.

"Growth in the U.S., Germany, France, Mexico, Turkey and South Africa is projected to be significantly more robust than previously anticipated, with smaller upward revisions in most other G-20 economies", it added.

As the USA prepares to impose tariffs on steel and aluminum imports, a world economic watchdog warned Tuesday that such barriers will hurt economic growth globally.

But even as the OECD raised its growth forecast for the majority of its 35-member countries and global economy, it also warned about growing tensions and "new policy challenges".

Álvaro Pereira, the OECD Acting Chief Economist, says the United Kingdom must have policies in place to address and improve living standards.

The US economy, by contrast, is seen expanding by 2.9 per cent this year and 2.8 per cent next, helped by the simulative effect of tax cuts. The report cites stronger private investment, a rebound in global trade and stronger employment all pointing toward making for a broad-based recovery.

"Governments of steel-producing economies should avoid escalation", it said in reference to US President Donald Trump's plan to impose tariffs on steel and aluminium imports.

"This could obviously threaten the recovery".

"Certainly we believe this is a significant risk, so we hope that it doesn't materialise because it would be fairly damaging".

Against that backdrop, the Federal Reserve would probably have to raise interest rates four times this year as inflation picks up, Pereira said.

"The world economy will continue to strengthen over the next two years", the OECD said.

It said pre-Christmas tax cuts in the USA, the world's largest economy, would account for much of the upgrade though it warned that protectionist policies were a big risk factor.

Among G20 countries, only Russia's growth rate is estimated to have decreased 1.5 percent in 2017.

A forecast of 1.3% growth for this year alone was made by the OECD, up from a 1.2% forecast made last November.