The growth of the World economy was 3.2% in 2022 and the Paris-based organization projects a 2.6% for this year and 2.9% for the nextfour and two tenths more than in their previous estimate of November, respectively.
The upward revision for 2023 reached most of the world’s large economies, although the organization lowered its growth forecasts 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 less.
And to Mexicoa member of the OECD, the report projects growth this year of 1.8%two tenths more.
The war in Ukraine “continues to have profound economic and social repercussions,” Cormann confirmed at a press conference.
No “systemic crisis”
The organization published these new forecasts in the midst of a storm in the banking sector.
For the OECD, interest rate hikes by central banks “could continue to bring out financial vulnerabilities linked to high indebtedness and excessive valuation of certain assets”, as recently demonstrated by the bankruptcy of three North American banks, including they Silicon Valley Bank.
The report stresses that the effects of the tightening of monetary policy are being felt “in certain segments of the banking sector, particularly among regional banks in the United States.”
However, the organization’s interim chief economist, Álvaro Pereira, ruled out at the press conference the risk of a “systemic crisis” comparable to that of 2008, estimating that banking regulation is “stronger” than then.
On the difficulties faced by the Credit Suisse bank, the general secretary considered that “the Swiss authorities reacted quickly to limit the risk of contagion.”
Another weakness in the current situation is the fall in real estate prices in many countries, which could have an impact on other sectors of activity.
“Progressive improvement” of inflation –
Despite all this, the OECD sees a “progressive improvement” in the general economic situation throughout 2023 and 2024, with a reduction in inflation.
In the G20 countries, which represent 85% of world GDP, the rise in prices will soften, and will go from 8.1% registered in 2022 to 4.5% in 2024, the OECD forecasts.
Inflation in Brazil and Mexico should “remain above target” in 2023, with 5.4% and 5.9% respectively, and fall at the end of 2024 due to the tightening of their monetary policies, to 4.3% and 3.4%.
Inflation in Argentina would remain at high levels in 2023 (85%) and 2024 (75%).
World growth will also benefit from “the complete reopening of China”, which is expected to rebound in 2023 after three years of “zero covid” policy, which had a notable impact on the activity of the second world economy.
Germany, the largest economy in the euro zone, would escape recession this year with a 0.3% expansion. France would grow by 0.7%.
In the United States, growth would reach 1.5%, compared to the 0.5% previously forecast for this year.
China’s growth would be 5.3%, compared to 4.6% anticipated in November. India could have the most robust growth in the G20, at 5.9%.
The OECD also raised the forecast for Spain, to 1.7% in 2023, four tenths more than in November.
