International trade-oriented businesses are likely to benefit from a modest recovery in global economic growth in 2018, according to a new report.
The Organisation for Economic Co-operation and Development (OECD) has published its latest Interim Economic Outlook, finding that economic growth is expected to pick up to around 3.6 per cent worldwide in the coming year, up from 3.3 per cent in 2017.
This improvement has been attributed to continuing and expected fiscal and structural initiatives in major nations such as China, Canada and the US, as well as the adoption of a more expansionary stance in the eurozone, all of which are expected to help drive private demand and bolster global business activity.
In the US, domestic demand will be driven by gains in household wealth and a gradual upturn in oil production, while Europe will continue its recent modest momentum, albeit held back by high unemployment and underemployment in certain nations.
Japan's fiscal easing policies and improvements to women's labor force participation are expected to help enhance prospects in this key economy, although China's transition away from an economy dependent on external demand and heavy industry towards domestic consumption and services will hinder its growth.
Despite the positive trends seen in many countries, the OECD expressed concerns that the recent rise of populist protectionist sentiments - such as those voiced by new US president Donald Trump - may damage global growth and trade prospects, impacting the large number of jobs that depend on trade. Additionally, it was noted that many countries are still being hit by subpar GDP growth and high inequality.
OECD secretary-general Angel Gurria said: "Growth is still too weak and its benefits too narrowly focused to make a real difference to those who have been hit hard by the crisis and who are being left behind.
"Now, more than ever, governments need to take actions that restore people's confidence, while at the same time resisting turning inwards or rolling back many of the advances that have been achieved through greater international cooperation."
