(Paris) The best, but in a very difficult international context: the OECD was a little more optimistic about global growth in its latest economic forecasts published on Wednesday, while warning of the “long road” before taking advantage of a sustainable recovery.
“We see a recovery on the horizon, but there is still a lot of work to free ourselves from the shocks of the past,” said Clare Lombardelli, newly appointed chief economist of the Organization for Economic Co-operation and Development, on Wednesday. a press conference presenting the institution’s global outlook.
After three years punctuated by repeated crises, the economy is showing signs of calm, symbolized by the slight increase in the OECD’s global growth forecast, expected for 2023 at 2.7% against 2.6% in March.
According to this report unveiled at a ministerial meeting at the institution’s Paris headquarters, the economy is benefiting from a lull in inflation after an explosion last year due to the consequences of the war in Ukraine on energy and food prices.
The OECD forecasts 6.6% inflation in its member countries this year after 9.4% in 2022. For 2024 it should drop to 4.3%.
This slowdown means that central banks could limit their interest rate hikes, which would bode well for access to credit for households and businesses, for consumption, and therefore for growth.
The recent restart of Chinese economic activity after its draconian zero-COVID-19 policy is also bringing some oxygen to the economy, underlines the OECD, with growth in China expected this year at 5.4%, an increase of 0.1 point compared to March forecasts, and 5.1% next year (+0.2 point).
The OECD forecasts 0.9% growth in the euro zone this year, (+0.1 point), thanks to a revaluation of Italian GDP growth to 1.2% (+0.6 point). French growth should reach 0.8% (+0.1 point) and Germany is expected with zero growth (-0.3 point).
The United Kingdom could post +0.3% this year, where the OECD previously predicted a recession.
“Delicate balance”
Outside Europe, GDP in the United States is expected to grow by 1.6% and India’s by 6.0%, up 0.1 points in both cases.
Despite the few encouraging signs, the world economy “faces a long road” before achieving “strong and sustainable growth”, tempered the chief British economist.
“The recovery will be weaker compared to past standards,” she also underlines, noting that with 2.9%, the global growth forecast for 2024 has been left unchanged from March.
Among the challenges cited by the OECD is the persistence of non-energy and food inflation which “remains stubbornly high” and requires central banks to “maintain restrictive monetary policies until there are clear signs “of appeasement, notes Mme Lombardelli.
However, high interest rates prevent the world economy from growing more frankly, by reducing the distribution of credit and encouraging savings rather than consumption.
“The period we are going through is characterized by slow growth, but that is what the decision-makers who aspired to dissipate inflationary pressures wanted,” observes AFP James Pomeroy, economist at HSBC.
According to him, “we have not yet seen everywhere the effects of interest rate increases on the economy”, which could be felt in the coming months in the euro zone and the United States and weigh further on the growth.
On this point, “central banks should not tighten their policy too much to the point that it would have a greater impact on growth than necessary”, estimated Mme Lombardelli, acknowledging that they face “a delicate balance”.
The rate hikes also weigh heavily on the public finances of the States by increasing the cost of their borrowing, which increases their debt, which is already largely dug by repeated crises.
“Nearly all countries have higher deficits and debt than before the pandemic, and many are facing increasing pressures on public spending linked to aging populations, climate transition and the burden of the cost of debt” , notes the report, which encourages States to target their budget support more.