This Tuesday, the OECD raised its global growth forecast for this year to 3%, but lowered its forecast for 2024, warning that activity will continue to be affected by inflation and high interest rates next year.
“The effect of restrictive monetary policy is increasingly visible,” says the OECD (Organization for Economic Co-operation and Development) in its quarterly report on the outlook for global growth and inflation, in which it lowers its growth forecast for 2024 at 2.7% (-0.2 points).
As a result, “business and consumer confidence is falling,” adds the Paris-based institution in its report titled “Tackling inflation and weak growth.”
For more than 18 months, central banks around the world have pledged to sharply raise interest rates to curb inflation reignited by the pandemic and the war in Ukraine.
“One of the main factors influencing global growth has been the increase in interest rates in most major countries since the beginning of 2022,” the OECD continues in the report.
However, this growth will be slightly better than previously forecast, with international growth forecast at 3%, 0.3 points higher than the June forecast.
This value was driven by several countries, particularly the United States, which could register growth of 2.2%, 0.6 points more than in June, after a strong second quarter.
The main emerging countries are also driving global economic activity: Brazil is expected to grow by 3.2% (+1.5 points), India by 6.3% (+0.3 points), Russia by 0.8% (+2.3 points) and South Africa 0.6% (+0.3 points). ).
Among the “Brics” countries, only China’s prospects were revised downwards, to 5.1%, that is, a drop of 0.3 points.
On the other hand, in the euro zone, “where demand is already moderate”, according to the OECD, growth is expected this year of 0.6%, 0.3 points less than in June, with the weight of Germany, which could enter recession, and Italy, whose forecast was reduced by 0.4 points, to 0.8%.
However, the euro area is expected to recover to 1.1% growth in 2024, “as the negative impact of high inflation on incomes dissipates,” the OECD notes.
Source: TSF
