Workers sewing shoes at a factory in Qingdao in China’s eastern Shandong province.
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Faltering trade growth in certain parts of the world amid increasing trade barriers and decline in investments are extremely worrying, the OECD’s chief economist Laurence Boone told CNBC Tuesday.
“I have been, and I continue to be, very very worried about what’s happening on the trade side. Let me just give you two numbers; Two years ago, in 2017, trade growth was 5.5% and today it’s closer to 2%, and in some regions like Europe it’s even close to 0%,” she told CNBC’s Hadley Gamble in Paris.
Boone added that trade and exchange are essential for both competition, innovation and employment. “More than a third of the jobs in every single country are actually in firms that export,” she noted.
“The other number I want to highlight is investment,” she said. “Again in 2017 investment was growing at more than 3.5% a year and today it’s growing at less than 1.7% a year and with investment goes jobs. So, we are slowly eroding growth and bringing it down to very low territory,” she said.
“We can’t afford that when we still have to raise the living standards of many people,” she said.
There are 36 members in the Paris-based Organisation for Economic Co-operation and Development (OECD); its goal is to promote policies that foster prosperity, equality, opportunity and well-being for all, it says.
It has warned in May that an intensification of the dispute between the U.S. and China would likely knock as much as 0.7% off the level of global GDP by 2021-22. The OECD predicts that the global economy will grow by 3.2% in 2019 and 3.4% in 2020.
On Monday, Boone warned that uncertainty had been created by several ongoing global situations, including the U.S. China trade spat, U.S. tensions with and sanctions on oil producer Iran and Brexit in Europe. “All these risks are really undermining the growth of today and tomorrow.”
Citing Brexit as an example she said that since the referendum on EU membership in 2016, investment growth in the U.K. had been a flat line.