▲ The Organization for Economic Co-operation and Development (OECD) announced the ‘OECD Interim Economic Outlook’ at 12:00 on the 17th (Friday) (local time in France).
[기계신문] The Organization for Economic Co-operation and Development (OECD) announced on the 17th (local time in France) ‘Interim Economic Outlook (Interim Economic Outlook)‘According to, Positive signs are appearing, such as improving business and consumer sentiment, falling energy and food prices, and complete reopening in China, and the world economy continues to grow in the 20A moderate recovery is expected over 23-2024, with inflation gradually slowing.
The global economic growth rate is projected to be 2.6% in 2023 and 2.9% in 2024, respectively +0.4%p and +0.2%p higher than the November 2022 forecast. In the US, growth is expected to gradually slow down due to easing demand pressure following monetary tightening, in the eurozone, a gradual recovery thanks to stabilizing energy prices, and in China, a rebound is expected this year.
Economic activity and business and consumer sentiment are improving due to a rise in purchasing power following falling energy and food prices, and global demand for goods and services is expected to expand due to China’s complete reopening. In particular, neighboring Asian countries are expected to benefit the most from the resumption of Chinese tourism.
Demand may be supported by a easing household savings rate after the pandemic, but tighter financial conditions, such as the impact of a steep rate hike becoming visible in the banking sector, are expected to affect the overall economy, including private investment.
▲ OECD ‘March 2023 Intermediate Economic Outlook’ Growth Rate Forecast (G20 countries)
Meanwhile, the G20 average inflation rate is projected to be 5.9% in 2023 and 4.5% in 2024.Compared to the November 2022 forecast, they were revised down by △0.1%p and △0.9%p, respectively. Inflation is expected to gradually stabilize due to slowing global growth, stabilizing energy and food prices, and monetary tightening in major countries.
The United States, which started monetary tightening earlier than other developed countries, is expected to make rapid progress in bringing inflation back to the target, while the eurozone and the United Kingdom are expected to stay above target for a relatively longer time.
Inflation is expected to slow in almost all G20 countries over the next two years. thatDespite this, inflation in most countries is projected to remain above target levels in 2024.
The OECD predicted Korea’s growth rate of 1.6% and 2.3% in 2023 and 2024, respectively, and the inflation rate at 3.6% in 2023 and 2.4% in 2024. As a result 20The 2023 growth rate forecast is lowered by △0.2%p compared to the November 2022 forecast.The 24-year growth rate forecast was raised by +0.4%p from the November 2022 forecast.
The OECD predicted that Korea, along with Australia, would benefit from the rebound in China’s growth, and that the impact of tight financial conditions would be offset. Korea’s inflation rate for 2023 was adjusted down by △0.3%p compared to the forecast for November 2022, but the inflation rate for 2024 was adjusted up by +0.1%p.
However, the OECD assessed that the improved outlook for global economic conditions is still on a “fragile” basis, and that upside and downside risks have recently been balanced, but downside risks are still somewhat dominant.
▲ OECD ‘March 2023 Interim Economic Outlook’ Consumer Price Outlook (G20 countries)
Geopolitical uncertainties such as the Russo-U.S. war, weakening food security in emerging countries, and deepening supply chain fragmentation may act as deteriorating factors for growth and prices. It is difficult to predict the aftermath of monetary tightening, and it is analyzed that uncertainty is latent in the pace and duration of monetary tightening to curb inflation.
In addition, the risk factors include increased burdens on households and businesses due to a sharp rise in interest rates, instability in financial institutions (SVB bankruptcy, etc.) and steep decline in housing prices. As shown in the SVB crisis, it was pointed out that a financial institution’s business model could be exposed to higher maturity risk due to rapid fluctuations in market interest rates and bond prices.
There is also the risk of expanding debt and fiscal deficits in emerging countries due to rising global interest rates. The risk of energy supply shortages always exists in Europe, and the possibility of a failure to reach an agreement to raise the debt ceiling in the US was also suggested as a downside risk.
As for future policy directions, the OECD recommended monetary tightening, fiscal policies targeting the vulnerable, resuming structural reform efforts, and joint responses to the climate crisis. While recommending that monetary tightening be continued until signs of easing inflationary pressure are clear, he pointed out that additional interest rate hikes are still necessary in most countries, including the US and the eurozone.
In addition, in order to alleviate the burden caused by high energy and food prices, it was recommended to use fiscal policies that selectively support the vulnerable. It was suggested that gradually reducing universal support and strengthening selective support would help to reduce additional demand stimulation and induce energy consumption reduction while securing fiscal sustainability.
In addition, to improve productivity and alleviate supply constraints, it was recommended to resume structural reform efforts such as enhancing business dynamism, easing cross-border trade barriers, activating people-to-people exchanges, and creating a flexible and inclusive labor market.
Lastly, the necessity of strengthening international cooperation for overcoming the energy and food crisis, supporting low-income countries’ debt burden, and carbon neutral efforts in response to the climate crisis was highlighted. Emphasized.
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