The OECD, like the IMF and the European Commission, has also confirmed forecasts of a slowdown in the economy due to the restrictive policies of central banks, inflation impacting consumption and geopolitical tensions, which make the picture more uncertain. Second the OECD Economic Outlookthe global economy continues to face the challenges of inflation and low growth prospects.”
GDP forecasts lowered
There GDP growth has so far been stronger than expected in 2023 – explains the Paris-based Organization – but now it is moderating due to tighter financial conditions, weak trade growth and declining business and consumer confidence.” GDP is expected to slow from 2.9% in 2023 to 2.7% in 2024 and 3% in 2025.
For Italy, modest growth is expected by 0.7% in 2024 and 1.2% in 2025. Germany will also have modest growth of 0.6% next year and 1.2% the following, while France will do little better in 2024 (+0.8%) to settle at 1.2% in 2025 .
THE risks for short-term prospects remain downwardly oriented and include the intensification of geopolitical tensions, for example due to the evolution of the conflict between Hamas and Israel, and a greater than expected impact of the tightening of monetary policy”.
Persistently high inflation
Inflation it will continue to remain sustained throughout next year and is expected to 5.2% in 2024 and 3.8% in 2025 from 7% expected in 2023. In the absence of further large shocks to food and energy prices, the OECD expects headline inflation to return to levels consistent with central bank targets in most major economies by end of 2025.
Central banks maintain restrictive policy
Monetary policy must remain restrictive, because there are clear signs that inflation pressures persist and in many economies the general inflation index remains above the central banks’ target value. “Restrictive policies It doesn’t necessarily mean an increase in rates“, specified the secretary general of the OECD Mathias Cormann, clarifying that a tbadger garlic by the Fed before second half of 2024later than market expectations.+
And the tax authorities control debt
As for fiscal policies, the OECD believes that they must prevent unsustainable increases in debt. “The report public debt/GDP today it is located at high levels in a historical perspective – it is underlined – and governments are facing growing fiscal pressures, deriving from multiple sources, including the aging population and the need to address climate change. The projections show that, in the absence of government action, the public debt-to-GDP ratio is destined to increase until reaching excessively high levels.”