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The OECD raises the global growth forecast for 2023 to 3%

The OECD’s global growth forecast rose to 3% this year, but fell by 2024. Several factors, such as lower business and consumer confidence, contribute to these scenarios.

This Tuesday, the OECD raised its global growth forecast for this year to 3%, but lowered its forecast for 2024, warning that activity will continue to be affected by inflation and high interest rates next year.

“The effect of restrictive monetary policy is increasingly visible,” notes the OECD (Organization for Economic Co-operation and Development) in its quarterly report on global growth and inflation prospects, in which lowers its growth forecast for 2024 to 2.7% (-0.2 points).

Due, “Business and consumer confidence is falling”adds the Paris-based institution in its report titled “Tackling inflation and weak growth.”

For more than 18 months, central banks around the world have committed to Drastically increase interest rates to curb inflation rekindled by the pandemic and the war in Ukraine.

“One of the main factors influencing global growth has been the increase in interest rates in most major countries since the beginning of 2022,” the OECD continues in the report.

However, this growth will be slightly better than previously forecast, with a forecast of international growth of 3%0.3 points more than June forecasts.

This value was driven by several countries, particularly the United States, which could register growth of 2.2%, 0.6 points more than in June, after a strong second quarter.

The main emerging countries also increase global economic activity: Brazil is expected to grow by 3.2% (+1.5 points), India by 6.3% (+0.3 points), Russia by 0.8% (+2.3 points) and South Africa by 0 .6% (+0.3 points).

Among the “Brics” countries, only China’s outlook was revised downwards, to 5.1%, a drop of 0.3 points.

On the other hand, in the euro zone, “where demand is already moderate”, according to the OECD, growth is expected this year of 0.6%, 0.3 points less than in June, with the weight of Germany, which could enter recession, and Italy, whose forecast was reduced by 0.4 points, to 0.8%.

However, the euro area is expected to recover to 1.1% growth in 2024, “as the negative impact of high inflation on incomes dissipates,” says the OECD.

Source: Observadora

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