OECD slightly increases annual growth outlook, warns headwinds remain

The global economy is now expected to grow at a slightly faster pace this year, according to the latest forecast on Wednesday from the Organization for Economic Co-operation and Development.

OECD said it now expects the global economy to expand 2.7% this year, a slight increase from its previous projection of 2.6%. However, when not including the pandemic-hit year of 2020, this would still be the lowest annual rate of growth since the 2008-2009 financial crisis, it noted.

Lower energy prices are easing the strain on household budgets, while business and consumer sentiment is also improving, the Paris-based organization said. The re-opening of China has also helped to boost global activity.

Growth is then expected to slightly accelerate to 2.9% in 2024 — unchanged from the OECD’s March forecast.

During that time, the OECD expects a recent spate of central bank interest rises aimed at corralling inflation to gradually weigh more on private investment, starting with the housing market.

The updated forecasts come a day after the World Bank raised its global growth outlook for this year, but warned that tight monetary policy and the war in Ukraine will continue to weigh on the global economy next year.

OECD slightly increases annual growth outlook, warns headwinds remain