The best, but in a very difficult international context: the OECD was a little more optimistic about global growth in its latest economic forecasts published on Wednesday, while warning of the “long road” before enjoying a sustainable recovery. “The global economy is turning around,” said Clare Lombardelli, newly appointed chief economist at the Organization for Economic Co-operation and Development, in the preamble to a report on the institution’s global outlook.
After three years marked by repeated crises, between the pandemic and the war in Ukraine, economic activity shows signs of calm, symbolized by the slight increase in the OECD global growth forecast, forecast for 2023 by 2.7%. compared to 2.6% in March.
slowdown in inflation
According to this report presented at an annual ministerial meeting at the Paris headquarters of the international institution, the world economy is benefiting from a pause in inflation after an explosion last year due to the consequences of the war in Ukraine over the prices of energy and food. In May, for example, inflation slowed down notably within the euro zone, to 6.1% in one year. It stood at 4.4% in the United States in April, well below the levels reached during 2022. This slowdown implies that central banks could limit their interest rate hikes, which bodes well for the economy. , and therefore for growth.
The recent restart of Chinese economic activity after its draconian Covid-0 policy is also giving the world economy some oxygen, stresses the OECD, forecasting growth in China this year of 5.4%, that is, an increase of 0 .1 point compared to March forecasts. and 5.1% next year (+0.2 pp).
The OECD forecasts growth of 0.9% in the euro zone this year, a slight increase of 0.1 points, thanks in particular to a revaluation of Italian GDP growth to 1.2% (+0.6 points). Growth in France should reach 0.8% (+0.1 points) and Germany is expected to grow at zero (-0.3 points). The UK could experience 0.3% growth this year, where the OECD previously predicted a recession. Outside Europe, the GDP of the United States should grow by 1.6% and that of India by 6.0%, forecasts are upward in both cases by 0.1 point compared to March.
More effects of interest rate hikes
Despite few encouraging signs, global economic activity “faces a long way to go before strong and sustainable growth is achieved,” tempered Britain’s Clare Lombardelli, who took up her OECD post nearly a year after the appointment of Laurence Boone for the French government.
Among the challenges cited by the OECD is the persistence of non-energy and food inflation that “remains stubbornly high” and forces central banks to “maintain restrictive monetary policies until there are clear signs” of appeasement, notes Clare Lombardelli. However, high interest rates prevent the world economy from growing more frankly, by reducing the distribution of credit and encouraging savings instead of consumption.
“The period we are going through is characterized by slow growth, but that is what the politicians wanted to dissipate inflationary pressures,” observes James Pomeroy, an economist at HSBC. Selon lui, “nous n’avons pas encore vu partout les effets des hausses de taux d’intérêt sur l’économie”, qui pourraient se faire sentir dans les mois à venir dans la zone euro et aux Etats-Unis et peser encore sur growth.
Rate hikes also weigh heavily on the public finances of States by increasing the cost of their borrowing, which increases their indebtedness, already sunk to a large extent by repeated crises. “Almost all countries have higher deficits and debt than before the pandemic, and many face increasing pressures on public spending related to population ageing, the climate transition, and the cost burden of debt,” the report says. , which encourages States to focus their budget support more.
Source: BFM TV
