Projections for GDP growth in the euro have been revised down to fall to 1% this year and 1.2% in 2020, from 1.8% in 2018, according to the OECD's Interim Economic Outlook, published on Wednesday. Thus, the forecast for the euro area has been reduced by 0.8 percentage points to 1 percent (against 1.8 percent in the previous year). The country's official fourth quarter results for 2018 won't be issued until March 21 by the national statistics institute INDEC.
The OECD's warning about slowing global growth comes just over 24 hours after China's central government said it would lower its growth target for gross domestic product, the latest sign that the world's second-biggest economy is in the grips of a major slowdown. "The growth forecasts have been revised downwards in nearly all G20 economies, with particularly large adjustments in the euro area both in 2019 and in 2020 ..."
But Argentina needs to carry out reforms that improve the outlook of its fiscal and financial sustainability in the medium term, the report added.
Central banks, including the U.S. Federal Reserve have responded to the changed circumstances, and the European Central Bank may soon follow.
"The global economy is facing increasingly serious headwinds", Laurence Boone, the OECD's chief economist said in a statement.
The OECD warned that a disorderly no-deal Brexit would likely pitch Britain into a recession and the knock-on effects could spill over into Europe and beyond. It predicted a slight recovery to 1.1 percent growth for 2020.
Boone also warned that a global economic crisis could be upon us, regardless of the outcome of Brexit. Meanwhile, British trade minister Liam Fox said on Wednesday the United Kingdom government had reached an internal agreement on import tariffs in case of a no-deal Brexit, declining to give details.
Trade restrictions imposed past year - most notably by the United States and China - are "a drag on growth, investment and living standards, particularly for low-income households", the OECD said in its report. "This would hit Europe particularly, where motor vehicle exports represent around one-tenth of total European Union merchandise exports to the United States", the OECD said. Governments should intensify multilateral dialogue to limit risks and coordinate policy actions to avoid a further downturn, she said.