OECD: Global economy 'more resilient than expected' but growth outlook 'remains weak'

investmentweek.co.uk:

Global GDP growth for 2024 is forecast to be 2.7%, compared with 3% in 2023, according to the OECD’s estimates.

Despite the global economy proving «more resilient than expected» in the first six months of 2023, the growth outlook «remains weak», the OECD said, due to persistent core inflation and weaker recovery in China.

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Global GDP growth for 2024 is forecast to be 2.7%, compared with 3% in 2023, according to the OECD's estimates, with a «disproportionate share» of global growth in 2023-24 expected to come from Asia, despite China's slowdown.

The organisation also noted headline inflation has continued to drop, largely driven by a decline in food and energy prices in H1 2023, and boosted by monetary policy interventions becoming increasingly visible, .

Yet core inflation has not enjoyed the same trajectory, remaining well above central banks' targets, partly caused by the services sector and a relatively tight labour market. 

The OECD warned there is a key risk that inflation could prove more persistent than expected, resulting in possible further interest rate hikes and a potential for them to remain higher for longer.

It also did not dismiss the possibility of additional disruptions to the energy and food markets, which could have an even greater impact on inflation.

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As a result of its outlook, the OECD has set out three recommendations for governments on how to tackle weaker growth and high inflation.

The organisation suggested monetary policy may need to remain «restrictive» for quite some time, until there are «clear signs that underlying inflationary