The OECD recently published its interim economic outlook, anticipating subdued growth among the major democratic economies through next year.
The OECD points to further downside risks to international trade, increased concerns about the fiscal health of the economies, renewed inflation pressures and financial instability, all of which could weigh on growth.
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The full impact of tariff increases is still unfolding, with early signs of the effect on consumer behavior, labor markets and prices, according to the outlook.
Labor markets are softening, with higher unemployment and fewer job openings in some economies, while disinflation has stalled in many economies as food prices rose and services inflation remained persistent.
These concerns have been building, with economists losing confidence in the ability of the major economies to withstand the assault on the normal exchange of goods and services among nations and the potential for higher inflation and reduced growth.
Since the end of last year, forecasts for this year’s GDP growth in the United States and the G-20 as a whole have dropped by roughly 0.37 percentage points.
In Europe, forecasts for GDP growth this year began to fall last year, with the forecast for Germany losing 0.8 percentage points and France losing 0.7 percentage points as the impact of the China shock settled in.
The RSM forecasts for U.S. real GDP growth for this year 1.5% and 2.3% for next. For Canada, we expect growth of 1.2% for both this year and next, and for the United Kingdom, 1.3% for both this year and next.
