The Organization for Economic Cooperation and Development (OECD) has released its latest Interim Economic Outlook, forecasting global growth for the next two years. According to the report, the global economy is expected to grow by 2.6% in 2023 and 2.9% in 2024.
The projected growth is attributed to several factors, including improved business and consumer confidence, declining food and energy prices, and the re-opening of the Chinese economy. However, the report also warns of persistent inflationary pressures, particularly in service prices and labor markets.
One positive note from the report is the expected decline in headline inflation, projected to gradually recede through 2023 in most G20 countries, from 8.1% in 2022 to 5.9% in 2023 and 4.5% in 2024. This decline is expected to be driven by lower food and energy prices and a gradual tightening of monetary policy.
Despite this optimistic outlook, the OECD warns that the global economic recovery is still facing several headwinds, including rising debt levels, supply chain disruptions, and geopolitical tensions. The report highlights the need for continued fiscal and monetary support to ensure a smooth and sustainable recovery.
Overall, the OECD’s latest Interim Economic Outlook offers a cautiously optimistic forecast for the global economy, with expectations of steady growth over the next two years. However, persistent inflationary pressures and ongoing economic uncertainties continue to pose risks to the recovery.
Despite the positive outlook, the report notes several risks that could derail the projected global economic recovery. One of the significant risks highlighted is the continued spread of COVID-19 and the emergence of new variants that could cause disruptions in economic activity. The report emphasizes the need for countries to prioritize the effective and equitable distribution of vaccines to achieve a more sustainable economic recovery.
In addition, the report cautions against the negative impact of potential trade tensions and geopolitical risks that could impact global economic growth. The OECD urges countries to work towards multilateral cooperation to reduce these risks and foster a more stable and predictable global economic environment.
The OECD’s Interim Economic Outlook provides a cautiously optimistic view of the global economy’s future. While there are still challenges ahead, the projected growth and decline in inflation offer hope for a more stable and prosperous economic landscape. However, policy essential ed to remain vigilant and implement policies prioritizing a sustainable and equitable economic recovery for all.