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The Organization of Economic Cooperation and Development on Tuesday lifted its forecast for global growth in 2023, but cut its outlook for economic activity next year.
The OECD forecast world growth of 3% this year, which represents a slowing from last year’s 3.3% but an improvement from the group’s previous estimate of 2.7% growth. The OECD however is now forecasting 2.7% growth in 2024, down from 2.9%.
“High-frequency activity indicators across the largest economies present a mixed picture, but on balance signal a loss of momentum in the second half of 2023,” said the OECD.
Like many forecasters, the OECD was surprised by how resilient the U.S. and other major economies have been in the face of aggressive interest rate hikes. Its U.S. GDP forecast was boosted to 2.2%, a 0.6 percentage point rise from its earlier view.
There were downgrades as well, notably to Germany, where the OECD now forecasts a 0.2% deterioration, and to China, where its forecast of 5.15 growth this year represents a downgrade of 0.3 percentage points.
The OECD sees the U.S. slowing down into an election year — it’s now forecasting just 1.3% growth in 2024. It said tighter financial conditions will moderate demand pressures.
