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The OECD has worsened its forecasts for the global economy for 2024

As the world’s major central banks tighten monetary policy and China’s economic recovery from the Covid-19 pandemic is weaker than expected, global economic growth in 2024 will be weaker than this year. Such forecast published Tuesday September 19 by the Organization for Economic Co-operation and Development (OECD).

“Global economic growth is expected to reach 3% in 2023 and slow to 2.7% in 2024,” the document said. Thus, compared to the organization’s June forecast, expectations for global GDP growth this year have been increased by 0.3 percentage points. At the same time, growth expectations for 2024 were lowered by 0.2 percentage points.

At the same time, the OECD estimates that a disproportionate share of global GDP growth in 2023-2024 will come from Asia, despite a weaker-than-expected economic recovery in China.

OECD on inflation rates

In the first half of 2023, inflation rates continued to fall in many countries due to falling food and energy prices, according to OECD experts. However, core inflation – that is, inflation excluding the most volatile components such as energy and food – has not slowed significantly. It remains well above the central bank’s targets, the report said. The main risk is that inflation will be more persistent than expected, the authors warn. Experts say this will require a further tightening of interest rates or a longer period of increases.

OECD forecast for Germany

German economic forecasts for 2023 have deteriorated. If in June OECD experts expected stagnation, the current report speaks of a reduction in German GDP of 0.2 percent. Looking at the eurozone as a whole, the OECD has revised its previous forecast downward by 0.3 percentage points. According to his estimates, total GDP growth will be 0.6 percent. At the same time, the downward forecasts for Germany and Italy are particularly visible.

Next year, the OECD expects German GDP to grow by 0.9 percent, 0.4 percentage points lower than indicated in the June report.

German Finance Minister Christian Lindner called the current OECD forecast for his country a “signal” to all politicians. Plans to boost investment, innovation and economic growth must be implemented “rapidly and comprehensively”, he said.

Improved forecast for Russia

As for Russia, forecasts for the development of its economy in 2023 have been improved. After an expected 1.5 percent drop in GDP in June, experts predict an increase in this indicator of 0.8 percent. Forecasts for 2024 were also improved, from a 0.4 percent decline in June estimates to a 0.9 percent increase.

Source: delfi

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