THE OECD revised the climb his forecasts for world growth for 2023 and 2024 thanks to falling inflation and China’s reopening, even as he warned this Friday of risk generated by the difficulties of some banks.
The Paris-based Organization for Economic Co-operation and Development now expects the world economy to grow by 2.6% this year and 2.9% next year.
Compared with what was expected in November, the OECD raised by four tenths your predictions for this year e in two tenths that of 2024. Last year, world growth was 3.2%.
Argentina, no
The OECD has revised its growth projections upwards in 2023 for most of the world’s major economies, although it has lowered them for Japan, South Korea, Brazil, Argentina and Turkey.
In the case of Brazil, the organization expects growth of 1% this year, two tenths less than in November. For Argentina, the projection is +0.1%, four tenths down.
And for Mexico, a member of the OECD, the report predicts growth this year of 1.8%, two tenths more.
Banking crisis and high interest rates
The organization released these new forecasts amid a storm in the banking sector.
As indicated, interest rate hikes by central banks “could continue to expose financial vulnerabilities linked to high debt and excessive asset appreciation”, as recently demonstrated by the failure of three North American banks, including Silicon Valley Bank.
The OECD underlined in its report that the effects of monetary policy tightening are being noticed”in some segments of the banking sectorparticularly among regional banks in the United States”.
Similarly, the OECD has highlighted another weakness in the current situation, drop in property prices in many countries, which could have an impact on other business sectors.
Despite all this, the OECD sees a “progressive improvement” in the overall economic situation throughout 2023 and 2024, with inflation declining.
In the G20 countries, which represent 85% of world GDP, the increase in prices will ease and go from 8.1% recorded in 2022 to 4.5% in 2024, predicts the OECD.
The Chinese opening
Furthermore, global growth will benefit “the complete reopening of China”, that a rebound is expected in 2023 after three years of a zero-covid policy, which has had a major impact on the activity of the world’s second largest economy.
Germany, the largest economy in the eurozonewould escape the recession this year with a growth of 0.3%.
In the United States, growth is expected to reach 1.5%, compared to 0.5% previously forecast for this year.
China’s growth would be 5.3%, compared to 4.6% expected in November. India may have the strongest growth of the G20, with 5.9%.
The OECD also raised its forecast for Spain, to 1.7% in 2023, four tenths more than in November.
AFP extension
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Source: Clarin
Mary Ortiz is a seasoned journalist with a passion for world events. As a writer for News Rebeat, she brings a fresh perspective to the latest global happenings and provides in-depth coverage that offers a deeper understanding of the world around us.