On Friday, the Organization for Economic Co-operation and Development raised its forecast for global growth as inflation slows and China reopens its borders after abandoning its zero-Covid policy, but the recovery remains fragile against the backdrop of significant difficulties faced by some banks.
The international organization currently expects global growth of 2.6% for the year 2023 and 2.9% for the year 2024, according to its interim economic forecasts.
And the Organization for Economic Cooperation and Development published these new figures, on Friday, amid a banking crisis, considering that raising interest rates “can continue to reveal financial vulnerabilities associated with high indebtedness and excessive valuation of certain assets,” as shown recently by the closure or bailout of many banks. American.
The Organization for Economic Cooperation and Development indicated in a statement that “signs of the impact of tightening monetary policies are beginning to appear in some aspects of the banking sector, especially in regional banks in the United States.”
“Sudden changes in market interest rates and the current market value of bond portfolios may also reveal long-term risks in financial institutions’ models, as evidenced by the March Silicon Valley collapse in the United States,” she added.
The organization did not take into account the difficulties that Credit Suisse faced this week in its report. The collapse of this bank poses a comprehensive threat to the global economy.
But despite the risks, the Organization for Economic Co-operation and Development expects a “gradual improvement” in the overall economic situation over the course of 2023 and 2024, with a slowdown in inflation.
Global growth is expected to benefit from the “full reopening of China’s borders”, which is expected to pick up in 2023.
The rise in commodity prices may decline in the G20 countries, which represent about 85% of the global GDP, to move from 8.1% in 2022 to 4.5% in 2024, according to the organization.
Compared to its last economic forecast in November, global growth rose by 0.4 percentage points for this year and 0.2 percentage points for next year.
Germany will now escape this year’s recession with growth of 0.3% vs. 0.7% for France, while US growth will be 1.5% vs. 0.5% previously expected.
