Global economy to grow by 2.7% in 2023 and 2.9% in 2024, down from 3.4% average in seven years prior to pandemic, says OECD

Global Economy

Intermoney| That the recovery is weaker in China is a reality, but certain issues should not be magnified, because as has been seen, there is a certain boost to domestic demand and it would be a problem of confidence among Chinese citizens that could be reversed. For the moment, the politburo does not seem to be taking any more generous measures than might be expected. Moreover, yesterday the OECD’s forecast for China continued to forecast growth above 5% in 2023 and 2024. However, the tightening of monetary policy and strong inflationary pressures are having an effect on economic activity and this was seen in the organisation’s forecasts for the coming years. The organisation’s latest economic outlook forecasts a 2.7% increase in global output this year and only a rise to 2.9% in 2024, both below the 3.4% average in the seven years prior to the pandemic.

The slowdown in the world economy will be experienced in both the US and the Eurozone, although not in the same way: The European Union will grow at a rate of 0.9% in 2023, up one tenth of a percentage point from the previous estimate, while in 2024 it will regain strength, growing at a rate of 1.5%. The United States will grow at a rate of 1.6% in 2023, also a tenth of a percentage point higher, while in 2024 it will grow by only 1%. The United Kingdom, for its part, has seen its growth estimates for this year increased by half a point to 0.3%, avoiding recession, but at the bottom of the G7.

Previously, the World Bank also gave a similar view, being more favourable for China (5.6% in 2023 and 4.6% in 2024). The agency expects global growth to decelerate from 3.1% in 2022 to 2.1% in 2023. According to the supranational body, growth in advanced economies will decelerate from 2.6 % in 2022 to 0.7 % this year and remain weak in 2024. By area, after growing by 1.1 % in 2023, the US economy is projected to decelerate to 0.8 % in 2024, mainly due to the lingering impact of the sharp rise in interest rates over the past year and a half. In the euro area, growth is projected to slow from 3.5 % in 2022 to 0.4 % in 2023, as a result of the delayed impact of monetary policy tightening and higher energy prices.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.