2023 world economic growth forecast to 2.6%: OECD

The Organization for International Economic Cooperation and Development (OECD) has said that inflation is decreasing.

China raised its global economic growth forecast on Friday after emerging from the Covid-19 lockdown. But the organization has issued a warning about the weakness seen in the upheaval of the US banking sector.

The OECD estimates that the growth rate of the world economy will increase by 2.6 per cent this year. In the projection made last November, this rate was estimated to be 2.2 per cent.

This is still low compared to the 3.2 per cent expansion seen in 2022, the Paris-based OECD has mentioned in its updated economic assessment entitled ‘A Fragile Recovery’.

The OECD said in its Interim Economic Assessment Report, “More positive signs are emerging as business and consumer sentiments begin to improve, food and energy prices decline and China’s market begins to fully open.”

According to the report, the recovery is still weak and risks have moderated to some extent but are tilted to the downside. Uncertainty during the war in Ukraine, the risk of new pressures on the energy market and the impact of rising interest rates are cited to confirm this.

Central banks around the world have raised interest rates to control decades of high inflation, but global markets are rife with fears that rising borrowing costs could push the economy into recession.

“Signs of the impact of tighter monetary policy are beginning to be seen in parts of the banking sector, including regional banks in the United States,” the statement said.

“Higher interest rates expose underlying fiscal weaknesses and may have a greater impact on economic growth than expected.

The study was conducted in connection with monetary tightening after the Silicon Valley Bank reported a loss of 1.8 billion US dollars on bonds that had reduced prices due to high-interest rates last week.

2023 world economic growth forecast to 2.6%: OECDOECDOrganization for International Economic Cooperation and Development