OECD Raises Global Economic Growth Forecast to 3.0% for 2023

Global Economic Growth Forecast Revised Up by OECD

In a recent report, the Organization for Economic Co-operation and Development (OECD) announced an upward revision to its global economic growth forecast for 2023. The new forecast now stands at 3.0%, up from the previous estimate of 2.7% in June. This positive outlook reflects the expected strong performance of the US economy, which is anticipated to mitigate the slowdown experienced last year, when it achieved a growth rate of 3.3%.

However, the forecast for 2024 has been revised downward to 2.7% from the earlier estimate of 2.9% in June.

The US economy is set to experience an improved growth rate this year, with the revised figure increasing from 1.6% to 2.2%. Although a slowdown is projected for 2024, the rate has been adjusted upward to 1.3% from the initial estimate of 1.0% in June.

This optimistic outlook for the US contrasts with the deteriorating economic situations in China and the eurozone. In fact, Germany is the only major country within the eurozone expected to face an economic contraction this year.

China’s growth rate is predicted to decline to 4.6% in 2024, compared to 5.1% in 2023. This downward revision is a result of the initial estimates of 5.4% for 2023 and 5.1% for 2024 in June.

For the euro area, the growth forecast has been adjusted to 0.6% in 2023 and 1.1% in 2024, down from the earlier predictions of 0.9% and 1.5% respectively in June.

While the outlook for global growth in the coming year remains somewhat weak, the OECD advises central banks to maintain high interest rates until there are clear indications that inflationary pressures are easing.

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On 19 September, the Organization for Economic Co-operation and Development (OECD) forecast the global economic growth rate in 2023 to be 3.0%, revised up from 2.7% in June. Photo taken in July 2021 at a factory in Lancaster, California (2023 Reuters / Mike Blake)

PARIS (Reuters) – The Organization for Economic Co-operation and Development (OECD) on Wednesday forecast global economic growth of 3.0% in 2023, revised up from 2.7% in June. The US economy is expected to perform well, limiting the slowdown from last year’s 3.3% growth.

The forecast for 2024 is 2.7%, revised down from 2.9% in June.

As for the US economy, the growth rate for this year has been revised upwards from 1.6% to 2.2%. The rate is expected to slow to 1.3% in 2024, but has been raised from 1.0% in June.

Reuters graphic

While the US economic outlook is improving, China and the eurozone are worsening. Germany is the only major country to expect an economic contraction this year.

China’s growth rate is expected to slow to 4.6% in 2024 from 5.1% in 2023. The rate was revised down from June (5.4% in 2023 and 5.1% in 2024).

The euro area growth forecast is 0.6% in 2023 and 1.1% in 2024. It was lowered from June (0.9% in 2023, 1.5% in 2024).

The OECD said that while the outlook for growth next year is generally weak, central banks should keep interest rates high until there are clear signs that inflationary pressures are easing.

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