Global Recession: America handled it… but now China has increased the tension, what will happen in 2024? – OECD raises 2023 US global growth outlook lowers 2024 expects inflation to persist tuta

The fear of a global recession this year is expected to last only till the global slowdown. The reason for this is that the possibility of recession in America has now been rejected. On the contrary, the forecasts regarding the growth rate there are now showing an increase. In fact, the OECD has predicted that the stronger-than-expected US economy is helping keep the global recession under control this year. But the weak Chinese economy may prove to be a big breaker in the path of economic recovery next year.

Global growth rate will decline in 2023
However, America’s strong performance has saved the world from recession this year. But despite this, the shadow of economic slowdown has deepened due to the weak performance of the EU and other major economies. According to OECD, last year the global growth rate was 3.3 percent. But this year global growth may slow down to 3 percent.

However, this new estimate is better than the June outlook, because then OECD had estimated global growth for this year at only 2.7 percent.

American economy showed strength
Obviously, the global growth forecast for this year has increased due to the strong performance of the American economy. According to OECD, this year America will grow at the rate of 2.2 percent, whereas in June, the growth estimate for America was only 1.6 percent. But America’s growth rate is expected to slow down to 1.3 percent next year. Still, this figure is more than 1 percent in June.

China will become a big challenge in 2024
This better performance of the American economy has helped the global economy to recover from the shocks faced by the Euro Zone, China and Germany. Regarding China, OECD believes that the Chinese economy will grow at the rate of 4.6 percent next year compared to 5.1 percent this year.

In June, OECD had estimated China’s growth rate at 5.4 percent this year and 5.1 percent for next year. According to OECD, the benefit that China got from the removal of Covid-19 restrictions is now beginning to slow down. Along with this, the real estate crisis in China is continuously deepening.

Crisis looms on Euro zone too!
Apart from this, OECD has reduced the growth outlook of Euro Zone from 0.9 percent to 0.6 percent this year. The Euro Zone’s growth estimate for the next year has been kept at 1.1 percent, but this is also less than the June estimate of 1.5 percent. Despite the weak growth rate forecast for next year, the OECD has suggested that the central bank keep interest rates high until inflationary pressures clearly subside.

Source link

Leave a Comment