A UK vote to leave the European Union on June 23 would trigger negative economic effects on the country, other European countries and the rest of the world, according to the Organisation for Economic Cooperation and Development (OECD).
Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if British withdrawal from the EU triggers volatility in financial markets.
By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the EU, the OECD said in its latest Global Economic Outlook Report.
The report draws attention to a number of downside risks, pointing out that the global economy “is stuck in a low-growth trap that will require more coordinated and comprehensive use of fiscal, monetary and structural policies to move to a higher growth path”.
“Growth is flat in the advanced economies and has slowed in many of the emerging economies that have been the global locomotive since the crisis,” OECD secretary-general Angel Gurría said at the OECD’s annual meeting in Paris this week.
“Slower productivity growth and rising inequality pose further challenges. Comprehensive policy action is urgently needed to ensure that we get off this disappointing growth path and propel our economies to levels that will safeguard living standards for all,” Gurría said.
Among the major advanced economies, the moderate recovery will continue in the US, which is projected to grow by 1.8% in 2016 and 2.2% in 2017.
The euro area will improve slowly, with growth of 1.6% in 2016 and 1.7% in 2017.
In Japan, growth is projected at 0.7% in 2016 and 0.4% in 2017.
The 34-country OECD area is projected to grow by 1.8% in 2016 and 2.1% in 2017, according to the report.