OECD raises 2023 U.S., global growth outlook, lowers 2024, expects inflation to persist

(Kitco News) - The better-than-expected performance of the U.S. economy has helped boost global GDP projections for this year, but the staggering Chinese economy has worsened the economic outlook for 2024, the Organisation for Economic Cooperation and Development (OECD) said on Tuesday.

After a stronger-than-expected start to 2023, helped by lower energy prices and the reopening of China, global growth is expected to moderate, the OECD wrote in their latest forecast. The impact of tighter monetary policy is becoming increasingly visible, business and consumer confidence have turned down, and the rebound in China has faded.

After enjoying a 3.3% growth rate in 2022, global gross domestic product is on course to expand by 3.0% this year, up from the 2.7% rate projected in the June outlook. However, global growth is now expected to slow to 2.7% in 2024, down from the 2.9% estimate published in the June forecast.

The U.S. economy is now expected to grow by 2.2% this year, significantly better than the 1.6% from the June report, with the OECD noting surprising resilience in the United States as it weathered an unprecedented series of rapid rate hikes. But U.S. growth is projected to slow to 1.3% next year as tighter financial conditions moderate demand pressures, which is still stronger than the 1.0% rate for 2024 expected in June.