The Organisation for Economic Co-operation and Development (OECD) has revised up its growth forecast for the global economy this year based on continued resilience in the U.S.
The Paris-based intergovernmental agency says it now expects the global economy to grow an annualized 3% in 2023, up from a previous forecast of 2.7%.
However, even at 3%, the global economy’s growth this year would represent a slowdown from the 3.3% expansion seen in 2022.
The OECD has also lowered its economic growth projections for 2024 as evidence mounts that China’s economy is slowing at a rapid rate.
With China acting as a drag on the global economy, the OECD forecasts growth of 2.7% next year, which is lower than a previous estimate of 2.9% growth.
The OECD forecasts that the Chinese economy will slow from 5.1% growth this year to 4.6% in 2024 as consumer spending fades and the property market stumbles.
The U.S. economy is now expected to grow 2.2% this year rather than the 1.6% previously forecast as America proves to be more resilient than most economists had anticipated.
However, the OECD predicts that the U.S. economy will slow in 2024 to 1.3% growth.
In Europe, Germany is expected to be the only major economy that falls into recession within the next year.
The OECD lowered its growth outlook for Europe this year to 0.6% from 0.9% previously but forecast that economic growth will rise next year to 1.1%.
As part of its latest report, the OECD said that central banks around the world should keep interest rates high until inflationary pressures are erased.
