OECD Predicts Worst Global Growth Since 2008

By Justice Nwafor • 1 week ago

The Organization for Economic Cooperation and Development (OECD) has painted a grim picture for the global economy. The international body predicts that the global economy will register its worst annual growth since the 2008 financial crisis in 2024, with a projected growth rate of just 2.7%. This revision marks a 0.2% decrease from the OECD’s June estimate and follows a lackluster expansion of 3% in 2023.

Key factors contributing to the economic slowdown include rising interest rates and a weaker-than-expected recovery in China from the pandemic. These developments have resulted in a ripple effect, hampering global economic growth and fostering uncertainty.

Inflation and Interest Rates: A Double-Edged Sword

OECD Chief Economist Clare Lombardelli has pointed out that the global economy is grappling with high inflation rates and low growth. Traditionally, central banks use interest rate hikes as a tool to curb inflation. However, these hikes are currently negatively impacting global economies and are likely to continue to do so. Moreover, the report suggests that any potential rate cuts are unlikely to occur until well into 2024, prolonging the period of economic uncertainty.

Germany Braces for Potential Recession

The OECD’s revised forecast for the euro area for 2023 indicates an economic slowdown. Germany, in particular, is predicted to face a contraction of 0.2% in its economy in 2023. If this occurs, Germany would join Argentina as the only G20 countries to face a recession, signaling a significant shift in the economic landscape.

A surge in oil prices has emerged as another significant issue affecting global economies. These rising prices have fueled inflation, especially in countries dependent on crude imports. Since May, crude prices have risen by 25% and are expected to continue impacting household budgets. The OECD identifies the volatility of oil prices as a significant risk to the global economy, further exacerbating the current economic slowdown.

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Justice Nwafor

Justice Nwarfor, a devoted and skilled journalist, concentrates on vital environmental concerns, climate change, and global health, primarily in West Africa. With a knack for uncovering underreported stories, Justice employs data-driven reporting techniques and is currently learning Python to further advance his abilities. Before joining BNN, he was a lead journalist at the Nigerian Tribune. His extensive journeys to remote communities have enabled him to amplify the voices of those frequently ignored by mainstream media. Throughout his career, Justice has highlighted the challenges faced by indigenous communities grappling with the consequences of deforestation, oil spills, gas flares, and rising sea levels. In addition, his investigations have exposed the severe realities of criminal gangs, illegal logging, and environmental devastation caused by mining.