Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024.
As inflation declines and China is freed from Covid limitations, the OECD boosted its projection for global economic growth on Friday.
But it also issued a warning about potential weaknesses, citing the instability in the US banking sector as an example.
In contrast to its earlier prediction made in November, the Organization for Economic Cooperation and Development now projects that the global economy will expand by 2.6 percent this year.
Yet it still falls short of the 3.2% expansion anticipated in 2022, according to the Paris-based OECD in its revised economic prognosis headlined “A Weak Recovery.”
In its Interim Economic Outlook report, the OECD noted that “more encouraging indications have now started to show, with business and consumer mood.
Continuing to improve, food and energy prices dropping back, and the full reopening of China.”
It cited the uncertainty surrounding how the conflict in Ukraine will play out, the possibility of fresh pressure on energy markets, and the effects of rising interest rates.
In a bid to curb decades-high inflation, central banks around the world have raised rates, but markets are concerned that the growing cost of borrowing could push economies into recession.
Regional banks in the United States and other areas of the banking sector have begun to show signs of the impact of tighter monetary policy “It read.
“Higher interest rates may potentially have a more significant impact on economic development than anticipated, especially if they reveal hidden financial weaknesses.
