Photo: Screenshot from the OECD website

Paris (People’s Daily) - The pace of global economic expansion over the 2018-19 period is expected to be faster than in 2017, but tensions that are appearing could threaten strong and sustainable medium-term growth, according to the OECD’s latest Interim Economic Outlook.

The OECD projects that the global economy will grow by 3.9 percent in both 2018 and 2019, with private investment and trade picking up while inflation is set to rise slowly.

The projections reflect slight improvements in the global economy since the previous Economic Outlook in November 2017, and cover all G20 economies.

“Growth is steady or improving in most G20 countries and the expansion is continuing,” said Alvaro Pereira, Acting Chief Economist of OECD.

“In this environment, an escalation of trade tensions would be damaging for growth and jobs. Countries should rely on collective solutions like the Global Forum on Steel Excess Capacity to address specific issues. Safeguarding the rules-based international trading system is key,” Pereira said.

The Outlook points out a number of financial sector risks and vulnerabilities, as well as those posed by a rise in protectionism. The OECD underlines thus a range of policies that would help to sustain medium-term growth.

It urges countries to add dynamism to structural reform efforts, particularly in the areas of taxation and skills, to boost employment and inclusive growth over the long term. The fiscal stance in advanced countries should support but not overstimulate demand.