Next year, the growth rate will slow further and reach 2.7 percent, but the global economy will avoid the so-called hard landing. The OECD stated this in its report on Wednesday.
This year’s forecast for the United States has been increased by the OECD to 2.4 percent from the previously forecast growth of 2.2 percent. She increased the outlook for next year from the previous 1.3 percent to 1.5 percent. The organization kept its estimate of this year’s eurozone growth at 0.6 percent, but lowered it to 0.9 percent for next year from the previously reported 1.1 percent.
A hard landing of the economy is understood as its sharp slowdown, which is not without side negative effects on businesses and consumers. Although this risk has eased in the US and elsewhere in the world, the risk of a recession remains. Persistent problems in the housing market, high oil prices and slow lending are to blame, according to the OECD.
The organization also expects a slowdown in the Chinese economy. The latter is struggling with problems in the real estate sector and consumers are saving more in the face of an uncertain outlook. According to the OECD forecast, its growth will moderate from this year’s 5.2 to 4.7 percent in 2024, which in both cases is slightly more than the OECD estimated in September. In 2025, the Chinese economy will continue to slow down and the growth rate will reach 4.2 percent, the organization expects.
Until recently, central banks, especially in the United States and Europe, raised interest rates very significantly in order to curb inflation. According to the OECD, monetary policy should also remain restrictive until there are clear signs that underlying inflationary pressures are being permanently reduced.