The OECD Forecasts Global Economic growth of 2.7% this year and 2.9% in 2024
The Organization for Economic Co-operation and Development has forecast a weak global economic recovery from the shocks caused by the coronavirus pandemic and the Russian invasion of Ukraine, due to persistently high inflation and the associated restrictive policies of leading central banks seeking to contain price pressures by raising interest rates.
In its latest economic outlook released on Wednesday, the OECD expected global growth to slow to 2.7% in 2023 from 3.3% a year earlier, a slight upward revision from the Paris-based organization's previous estimate for an expansion of 2.6 percent in the current year.
For 2024, the OECD continues to forecast that global gross domestic product will grow by 2.9 percent.
However, the expected economic recovery this year and next would be below the average growth of 3.4% in the last few years before the Covid-19 pandemic.
The US, the Eurozone and China will see a relative slowdown in their economic recovery as inflation will be stronger than in the period up to 2019, the OECD report said.
The organization expects the US GDP to grow by 1.6% this year and by 1% in 2024, the Eurozone - by 0.9% and 1.5% respectively, China - by 5.4% and by 5 .1%, Great Britain - by 0.3% and 1.0% and Japan - by 1.3% in 2023 and 1.1% in 2024, respectively.
At the same time, inflation in OECD member countries is expected to reach 6.6% in 2023, before slowing to 4.3% in 2024, with annual inflation in major advanced economies expected to be slightly above 2.25% only by the fourth quarter of next year.
The inflationary situation poses problems for central banks as they must continue to respond to underlying price pressures that are proving stronger than expected while not hurting economic growth too...