Global GDP is expected to grow from +3.3% in 2022 to +3.0% in 2023 (+0.3 compared to previous estimates in June) and to +2.7% in 2024 ( -0.2% compared to previous estimates from June): This is what emerges from the OECD Intermediate Economic Prospects published today.
In the euro zone, according to the Paris-based international body, GDP is expected to rise from +3.4% in 2022 to +0.6% in 2023 (-0.3% compared to June estimates) and to 1 .1% in 2024 (-0.4%). For Italy, the OECD forecasts a GDP of +0.8% for both 2023 (-0.4% compared to the previous estimates in June) and 2024 (-0.2% after +3.8% in 2022 ).
According to the OECD, headline inflation in the G20 will gradually fall from 7.8% in 2022 to 6% in 2023 to 4.8% in 2024. In the Eurozone, headline inflation is expected to fall from 8.4% in 2022 to 5.5% in 2023 (-0.3% compared to previous estimates in June) and to 3% in 2024 (-0. 2%) will increase. Also in Italy, inflation is expected to increase gradually from 8.7% in 2022 to 6.1% in 2023 (-0.3% compared to the previous June estimates) and to 2.5% in 2024 (-0.5% compared to previous estimates).
The OECD’s economic outlook “is subject to significant risks. The main risks include higher than expected inflation, which requires a restrictive monetary policy,” said OECD Secretary General Matthias Cormann at the presentation of the OECD Intermediate Economic Prospects. “Monetary policy must remain restrictive” until there are “clear signs” of improving inflation, he warned, citing a weaker-than-expected Chinese economy among other risks. “The weaker than expected recovery in China – he explained – is weighing on global growth.”
“Macroeconomic policy must prioritize reducing inflation and restoring fiscal margins. At the same time, to lay the foundations for stronger and more sustainable growth in the long term, public authorities must take measures to boost competition and accelerate investment in research, development and economic-emissions technologies and to reduce rather than strengthen trade barriers.” said Corman.
In the Intermediate Economic Outlook presented in Paris today, the OECD points out a number of risks. Inflation in particular could be even stronger than expected as energy and food markets continue to face potential turbulence.
For the Paris-based international body, “a renewed slowdown in Chinese growth could also impact trading partners around the world and hit business confidence.” The Paris-based committee, headed by the Australian Mathias Cormann, emphasizes that national debt is still high in many countries.
To combat inflation, it said in a statement, the OECD recommends “maintaining the restrictive stance of monetary policy until there are clear signs of a sustained reduction in inflationary tensions. As the effects of the interest rate increase will materialize,” the OECD said, “The monetary authorities of many countries will likely need to maintain interest rates at current levels or similar levels in 2024.” Member states are also asked to “develop credible medium-term budget plans and implement, taking into account growing future spending needs (…) to address the challenges posed by population aging, defense, climate change and increasing debt burdens”.
“Growth remains positive but fragile and persistent inflation poses a greater risk,” said the OECD’s summary message.
“The difficulty for Italy is growth or the lack of growth. “Our recommendation to the Italian authorities is to introduce structural reforms to address weak growth, which means, for example, strengthening competition and innovation,” said OECD chief economist Clare Lombardelli, responding to the question at the press conference presenting the economic outlook in Paris from ANSA what their proposal is to strengthen the Italian economy. “Pushing ahead with structural reforms: that would be our recommendation for Italy,” he added.