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The Organisation for Economic Cooperation and Development (OECD) said it has cut its 2019 global growth forecast to 3.5 per cent from 3.7 per cent predicted in its earlier report. The OECD, which advises many of the world’s richest economies, said the global economy has passed its peak and faces a slowdown due to trade disputes and higher interest rates.

The Paris-based agency also warned that if the United States were to hike tariffs to 25 per cent on all Chinese imports, as President Trump has threatened, the world economic growth could fall to nearly 3 per cent in 2020. A full-blown trade war and the resulting economic uncertainty could knock as much as 0.8 per cent off global gross domestic product by 2021, according to the OECD estimate.

The agency said the global growth slowdown would be worst in non-OECD countries, with many emerging-market economies likely to see capital outflows as the United States Federal Reserve gradually raises interest rates, per News Agencies.

The OECD cut its outlook for countries at risk such as Brazil, Russia, Turkey and South Africa.

“Trade conflicts and political uncertainty are adding to the difficulties governments face in ensuring that economic growth remains strong, sustainable and inclusive,” said Angel Gurria, Secretary-General of OECD.

The OECD said that while labour markets are in good health in major economies like the U.S., trade and investment have taken a hit as a result of higher tariffs.

Established in 1961, the OECD currently has 36 member-countries across the globe. These countries include many of the world’s most advanced countries and emerging markets such as Mexico, Chile and Turkey. The OECD also work with emerging economies such as China, India and Brazil, and developing countries in Africa, Asia, Latin America and the Caribbean. The OECD aims to promote policies that will improve the economic and social well-being of people around the world.