The OECD has predicted the worst economic slowdown since 2008
© Pete Starman/Pete Starman
Growth in the global economy will remain anemic as rising interest rates squeeze business activity, while China’s recovery from the pandemic has proved weaker than expected, the Organization for Economic Cooperation and Development (OECD) announced on Tuesday.
In its latest Economic Outlook report, the OECD revised downwards its global economic forecast for 2024, expecting growth to slide to 2.7% next year, down by 0.2% from its June estimate, after an already «sub-par» expansion of 3% this year.
The world economy will face its weakest annual growth next year, excluding 2020, when Covid-19 struck, since the global financial crisis, the Paris-based organization predicted.
«While high inflation continues to unwind the world economy remains in a difficult place,» OECD chief economist Clare Lombardelli told reporters on Tuesday. «We’re confronting the double challenges of inflation and low growth.»
Interest-rate hikes aimed at curbing inflation are taking their toll and are expected to have a further negative impact on economies worldwide, the OECD warned. Meanwhile price growth shows little sign of easing, leaving «limited scope for any rate cuts until well into 2024.»