World economy risks getting caught in ‘low-growth trap’

PARIS – The world economy risks getting caught in a “low-growth trap” if governments don’t spend more on investments, open up to trade, and make reforms, a top economic forum warned Wednesday. Logo photo courtesy of soils.org   The Organisation for Economic Co-operation and Development said in a wide-ranging report that it is increasingly pessimistic about the global outlook and cut its growth forecasts. Among the risks identified by the Paris-based economic agency, which represents the world’s most developed economies, was a potential British exit from the European Union, volatility in financial markets, and Europe’s inability to find a common response to its refugee flows. Above all, the OECD said in its Global Economic Outlook that weak growth risks becoming chronic. “This low growth trap involves a cycle in which diminished expectations become self-fulfilling,” said Angel Gurria, the OECD’s secretary-general. According to the OECD, firms are too cautious to invest, [...]