OECD Lowers Global Growth Expectations: Negative Impact of Western Interest Rate hikes on the Global Economy
According to a report by Russia's International News Agency on the 19th, the Organization for Economic Cooperation and Development announced on the same day that global economic growth will remain weak due to rising interest rates squeezing business activities. The OECD has lowered its global economic growth forecast for 2024.
In the latest Economic Outlook report, the OECD predicts that economic growth will decline to 2.7% next year, a decrease of 0.2 percentage points from June's forecast, and this year's growth is already below the standard 3%. In addition, the OECD predicts that the world economy will face its weakest annual growth since the 2008 global financial crisis next year. OECD Chief Economist Lombardy said that high inflation continues to put the world economy in a difficult situation, and the world is facing a dual challenge of inflation and low growth.
The OECD warns that interest rate hikes by Western countries aimed at curbing inflation are causing losses and are expected to have further negative impacts on the global economy. Lombardy stated that the impact of monetary policy tightening is becoming increasingly evident, leading to a decline in confidence among businesses and consumers. Meanwhile, there is almost no sign of a slowdown in price growth, and there is limited room for interest rate cuts by 2024.
The OECD has also significantly lowered its growth forecast for the eurozone this year and warned that the German economy will shrink by 0.2% in 2023. This will make the EU's number one economy the only G7 country facing recession.