PARIS (Reuters) – Growth in the global economy will pick up only moderately in 2024 as the full impact of central bank rate hikes will be felt, mitigating the positive consequences of lower inflation, said the OECD on Wednesday, while slightly raising its outlook for 2023.

The world economy is expected to grow this year by 2.7%, estimates the Organization for Economic Co-operation and Development in its economic outlook, while it was counting on a rate of 2.6% in its interim report last March. .

Although stimulated by the lifting of health restrictions in China, this growth will be the weakest since the financial crisis of 2008-2009, if we exclude the year 2020 marked by the COVID-19 pandemic.

Activity will pick up only slightly in 2024, to a rate of 2.9% (unchanged from the March forecast), as interest rate hikes by central banks over the past year is weighing more and more on private investment, starting with the real estate market.

The OECD forecasts that inflation among G20 countries will fall from 7.8% last year to 6.1% this year and 4.7% next year, still well above the target set by many central banks.

The US Federal Reserve’s main interest rate should soon peak at 5.25-5.5%, predicts the OECD which expects “modest” Fed rate cuts in the second half of 2024.

In the eurozone, the OECD believes the European Central Bank will continue to raise rates in the face of stubbornly high inflation, with a peak expected in the third quarter of this year. The organization predicts that the ECB will then keep its main key rate at 4.25% until the end of 2024.

The Bank of Japan is expected to continue its accommodating monetary policy, without raising rates until the end of next year.

The OECD predicts that the US economy will grow by 1.6% this year before slowing to 1% in 2024, with a particularly severe impact from monetary tightening.

The Chinese economy, revived by the end of the “zero-COVID” policy last winter, should grow this year by 5.4% before slowing slightly next year to 5.1%. The OECD raised its forecast, as it previously forecast 5.3% and 4.9% respectively.

After the shock of rising energy prices this winter, growth in the euro zone should accelerate from 0.9% this year to 1.5% in 2024, thanks to the lower weight of inflation on the level of life. In March, the OECD forecast 0.8% growth in 2023 and 1.4% in 2024 for the region.

For France, the OECD has raised its growth forecast from 0.7% to 0.8% for 2023, and is still betting on a rate of 1.3% in 2024.

(Report Leigh Thomas, Jean-Stéphane Brosse, edited by Bertrand Boucey)

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