OECD forecasts a significant global growth slowdown in 2023

In its latest report, the Organisation for Economic Cooperation and Development (OECD) said on Tuesday, “our central scenario is not a global recession but a significant growth slowdown for the world economy in 2023.”

Additional takeaways

Global growth of 3.1% in 2022, 2.2% in 2023 and 2.7% in 2024 (previously 3.0% in 2022, 2.2% in 2023).

Sees US growth of 1.8% in 2022, 0.5% in 2023, 1.0% in 2024 (previously 1.5% in 2022, 0.5% in 2023).

Sees Euro area growth of 3.3% in 2022, 0.5% in 2023, 1.4% in 2024 (previously 3.1% in 2022, 0.3% in 2023).

Sees Japanese growth of 1.6% in 2022, 1.8% in 2023, 0.9% in 2024 (previously 1.6% in 2022, 1.4% in 2023).

Sees Chinese growth of 3.3% in 2022, 4.6% in 2023, 4.1% in 2024 (previously 3.2% in 2022, 4.7% in 2023).

Sees UK growth of 4.4% in 2022, -0.4% in 2023, 0.2% in 2024 (previously 3.4% in 2022, 0.0 in 2023).

Further tightening of monetary policy is essential to fight inflation.

Fiscal policy support should become more targeted and temporary.

Market reaction

The dire global economic outlook projected by the OECD fails to affect the improved market mood, with US S&P 500 futures adding 0.23% on the day. The US Dollar Index is down 0.36% so far, trading at 107.45, at the press time.