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Big economies like India, China to suffer more if trade tariffs rise: OECD

Global growth would slow as rates in the big emerging economies, now on average over five percent, converged with the 2 percent expected on average in OECD counties by 2060

Reuters  |  PARIS 

US China trade war
Emerging economies would have a much better chance of raising living standards to OECD levels by 2060 if they improved governance and education

Big emerging economies like and will suffer more than developed countries if trade tariffs return to 1990 levels, the said on Thursday in an update of its long-term economic projections.

The estimated that higher average would gradually knock half a percentage point off real global GDP growth.

By the end of the OECD's forecast horizon in 2060, that would leave average living standards about 14 percent lower than they could otherwise be expected to be.

However, Brazil, Russia, India, and could expect an 18-percent loss of per capita real GDP by 2060, the projected.

The 36 developed countries belonging to the would see living standards fall 6 percent on average and the euro area only 4.5 percent given the high level of trade among them and the fact EU tariffs were already low in 1990, the OECD said.

In a business-as-usual scenario without significant reforms, annual global economic growth was seen gradually slowing over the next 40 years from 3.4 percent currently to 2.0 percent.

Global growth would slow as rates in the big emerging economies, now on average over five percent, converged with the 2 percent expected on average in OECD counties by 2060.

China's share of global economic output was seen peaking in the 2030s at about 27 percent while India's would keep growing. By 2060, both were expected to make up a fifth of global output and OECD countries over 40 percent.

Emerging economies would have a much better chance of raising living standards to OECD levels by 2060 if they improved governance and education, the OECD said.

Meanwhile, OECD countries that made their product markets more competitive could raise living standards by eight percent. Labour market reforms could add another 10 percent, which could reach 14 percent in countries seen as having the most ground to catch up, such as Italy, and

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 17:55 IST
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