The Organization for Economic Cooperation and Development (OECD) recently stated that the global economy will slow slightly next year, but the risk of a severe economic recession has decreased despite the high level of debt and uncertainty about interest rates.
Global growth is expected to slow from 2.9% this year to 2.7% in 2024 before increasing in 2025 to 3.0%, based on the latest Economic Outlook released by the OECD.
Growth in the economies of the developed countries that make up the 38 OECD members is expected to slow down.
The OECD's chief economist, Clare Lombardelli, is of the view that monetary policy needs careful adjustment to push inflation to target levels while at the same time reducing the impact on growth".
The OECD predicts US growth will slow from 2.4% this year to 1.5% next year, upping its estimates from September when it forecast US growth of 2.2% in 2023 and 1.3% in 2024.
Although the risk of a recession in the United States and elsewhere has diminished, the OECD notes that the risk of a recession remains because of a weak real estate market, high oil prices, and sluggish lending. China's economy is also expected to slow as it faces the challenge of a deflating property bubble and consumers save more amid uncertainty about future prospects.
Growth is expected to slow from 5.2% this year to 4.7% in 2024, both slightly higher than expected in September before slowing further in 2025 to 4.2%, according to OECD forecasts.
In Europe, growth is expected to increase from 0.6% this year to 0.9% in 2024 and 1.1% in 2025 with Germany, the region's largest economy, emerging from recession this year.
However, the OECD warned that due to high levels of bank funding in the European union, the full impact of interest rate hikes remains uncertain and may put more pressure on growth than expected.
