OECD says global economy is improving
(05.04.2023) Boosted in part by the decrease in energy prices, the Organization for Economic Cooperation and Development (OECD) predicts global economic growth of 2.6% in 2023, which is 0.6 points lower than in 2022. However, caution is still necessary.
Buoyed by several positive trends, such as the end of COVID-related restrictions in China, the fall in crude oil prices, and the slowdown in inflation, the global economy is expected to regain some momentum after a period of significant uncertainty in late 2022. However, the OECD warns that growth will remain below its usual level in 2023 and 2024.
Among the G20 economies, only the UK (-0.2%) and Russia (-2.5%) are expected to experience a recession in 2023. The Eurozone economy is projected to grow by 0.8%, while Asian economies are projected to outperform the global average: China (5.3%), India (5%), and Indonesia (4.7%) are likely to remain ahead in terms of economic growth in 2023.
Global inflation also seems to be slowing down, mainly due to the decrease in energy and food prices. In the G20 economies, the average increase in prices should amount to 5.9% in 2023. In the United States, it could even approach the so-called "normal" range (<2%), at 3.7%.
The tense situation in the job market continues to fuel underlying inflation (excluding energy and food prices). In the Eurozone, service inflation stood at 4.8% in February 2023, up from 3.3% in June 2022, 4.2% in September, and 4.4% in December, indicating a persistent upward trend. However, goods inflation has significantly slowed to 11.1%, after peaking at 15.2% in October 2022.
The recommendations of the OECD call for the continuation of restrictive monetary policies to curb price increases as well as more targeted fiscal aid.