Economic growth in OECD area slows to 0.5%

Economic data from the Organisation for Economic Co-operation and Development is confirming ominous signs of an increasingly weaker global economy.

Growth of real gross domestic product in the OECD area slowed to 0.5% in the second quarter of 2019, compared with 0.6% in the previous quarter, according to provisional estimates.

Among the major seven economies, GDP growth slowed markedly in the United Kingdom to minus 0.2% from 0.5% in the first quarter of 2019 and in Germany to minus 0.1% from 0.4%.

GDP growth also decelerated, albeit more moderately, in the United States and Japan to 0.5% and 0.4% respectively, from 0.8% and 0.7% in the previous quarter. France and Italy also saw marginal declines to 0.2% and 0.0% from 0.3% and 0.1%.

GDP growth also slowed in the European Union and the euro area to 0.2% compared with 0.5% and 0.4%, respectively, in the previous quarter. Year-on-year GDP growth for the OECD area of 1.6% was minimally down when compared to the 1.7% growth in the previous quarter. Among the seven largest economies in the OECD, the United States recorded the highest annual growth (2.3%), while Italy recorded no annual growth (0.0%).

OECD chief economist Laurence Boone has repeatedly warned this month in the international press that the slowdown in manufacturing prompted by trade tensions will spread to other sectors that have so far been less affeced. European governments, Germany and the Netherlands in particular, will need to increase spending to stimulate the economy, she said.