Global growth to hit 10-year lowBusiness | Agencies and Stella Zhai 20 Sep 2019
More central banks cut rates cut rates yesterday as the Organization for Economic Co-operation and Development forecast the global economy would grow at its slowest pace in 10 years amid the Sino-US trade war.
Central banks of Indonesia and Brazil followed the US Federal Reserve to reduce their benchmark interest rates by 25 basis points and 50 basis points, respectively while the Bank of Japan, the Bank of England and the Swiss National Bank kept their guiding rates unchanged.
The Hong Kong Monetary Authority also lowered its base rate to 2.25 percent from 2.5 percent, hours after the Fed's quarter-point move on Wednesday.
The Bank of Norway, however, increased its rates by 25 basis points to 1.5 percent, its fourth hike in the past year in an effort to cool an economy stoked by oil investments.
The trade war between the United States and China has plunged global growth to its lowest levels in a decade, the OECD said as it slashed its forecasts.
The institution said that the global economy risked entering a new, lasting low-growth phase if governments continued to dither over how to respond.
The global economy will see its weakest growth of 2.9 percent this year before a predicted 3.0 percent in 2020, the OECD said.
The Paris-based policy forum estimates the global economy would grow 3.2 percent this year and 3.4 percent in 2020. It also predicts the US economy to grow 2.4 percent this year and 2 percent next year, while China would also feel the pain with the second-biggest economy growing 6.1 percent in 2019 and 5.7 percent in 2020.