The OECD raises its forecasts for the world economy, “which remains fragile”

PARIS (Reuters) – The global economic outlook is improving as the inflationary shock will subside, but rising interest rates will keep risks high, the OECD said on Friday, revising upwards its growth forecasts for major economies.

Global gross domestic product (GDP) is expected to grow 2.6% in 2023, after 3.2% last year, as monetary tightening by central banks takes full effect, estimates the Organization for Cooperation and Development. economic development.

In its outlook released in November, the Paris-based organization forecast GDP growth of 2.2%, citing lower energy and food prices and China’s easing of anti-corruption restrictions. COVID.

For next year, global growth is expected to pick up to 2.9% – from a forecast of 2.7% in November – as the impact of high energy prices fades.

Regarding inflation, the OECD anticipates a slowdown in price increases in the G20 countries to 5.9% this year then 4.5% in 2024, against 8.1% last year. However, it will remain well above central bank targets despite the rate hikes decided by most of them.

The OECD finds it difficult to assess the full impact of rising interest rates, warning that increased stress on borrowers could translate into losses for banks, as shown by the recent bankruptcy of the Silicon Valley Bank in the United States.

Despite investors’ doubts about Credit Suisse’s ability to weather the financial turmoil, the European Central Bank raised interest rates an additional half a percentage point on Thursday to fight inflation.

Key central bank rates, according to the OECD, are expected to peak at 5.25-5.5% in the United States and 4.25% in the eurozone and Great Britain, with lower inflation expected. allow for a “slight” easing next year.

Expected growth in the United States is expected to slow to 0.9% in 2024 after a forecast of 1.5% for this year, as higher interest rates cool demand. However, with the US labor market holding up better than expected, GDP was raised this year after a forecast of 0.5%, but reduced for 2024 (1.0%).

Boosted by the abandonment of the “zero COVID” policy, the Chinese economy is expected to grow by 5.3% this year and 4.9% in 2024, against expectations of 4.6% and 4.1%, respectively, in November.

The outlook for the Eurozone has also improved thanks to lower energy prices. The 20 countries sharing the single currency are expected to grow by 0.8% this year (revised from 0.5%), then 1.5% in 2024 (revised from 1.4%).

(Written by Thomas Leigh, French version Kate Entringer, edited by Blandine Hénault)

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