THE global economic expansion appears to have peaked, with diverging growth prospects worldwide and intensifying risks, according to the OECD’s latest Interim Economic Outlook.

Economic growth prospects are now slightly weaker across the board than anticipated in May. Escalating trade tensions, tightening financial conditions in emerging markets and political risks could undermine strong and sustainable medium-term growth worldwide.

The OECD projects that the global economy will grow by 3.7 percent in both 2018 and 2019, with rising differences across countries, in contrast to the broad-based expansion seen in the latter part of 2017 and earlier this year. Confidence has weakened, trade and investment growth have proven slower than anticipated and wage growth has remained modest across most countries despite OECD-wide unemployment having fallen below pre-crisis rates. The outlook and projections reflect a downward revision of the global economy since the previous Economic Outlook in May 2018, and cover all G20 economies.

The Outlook identifies the worrisome slowdown in trade growth - combined with widespread political uncertainty - as the principal factor weighing on the world economy. It underlines that further trade restrictions could have adverse effects on jobs and living standards, particularly for low-income households.

The Outlook calls on policymakers to enhance resilience, boost productivity and improve inclusiveness. Policy should address the root causes of financial market pressures, including excessive asset prices and indebtedness in various forms, both public and private; improve resilience to shocks in both emerging and advanced economies; steer fiscal policy toward measures that support long-term growth; and focus reforms on skills and labour market inclusion to improve opportunities for all.