The OECD reduces its forecasts for the eurozone and China, and improves them for the US.

The OECD further reduces its forecasts for anemic growth for this year and next in the euro zone, weighed down mainly by Germany and with the notable exception of Spain, and is also more pessimistic with China, while improving the prospects for the United States .

In its interim Outlook report published this Tuesday, the Organization for Economic Cooperation and Development (OECD) presents figures from the members of the G20 and, with the large emerging countries, is much more optimistic than in June about the evolution of Brazil, while with Argentina the opposite is true and it will be the only one that will be in recession both this year and next.

The global gross domestic product should grow by 3% this year, which means three tenths more than what had been anticipated in June, but three tenths less than in 2022.

By 2024, this slowing trend will continue, with a gross domestic product (GDP) that will rise only 2.7%, three tenths less than what was predicted before the summer.
Germany, the sick engine of the eurozone

The euro zone is experiencing one of the biggest corrections, with three tenths less in 2023 and GDP growth that will be limited to 0.6% and which has to do with the recession in which Germany is mired (-0. 2% in 2023), but also with the disappointing performance of Italy (0.8%, four tenths less than in June).

Of the countries in the single currency, France is a little saved with a growth of 1% in 2023 (two tenths more) and especially Spain, which with 2.3% (two tenths more) will almost quadruple the growth rate. average expansion of the eurozone.

For next year, the same trend within the single currency will be maintained globally, but without so many divergences. The average growth will be 1.1% (four tenths less than what the OECD advanced in June), with 0.8% in Italy, 0.9% in Germany, 1.2% in France and 1 .9% in Spain.

The United States surprises with its capacity for resistance. The authors of the study have increased their expectations for this year by six tenths, to 2.2%, and by three tenths for next year, to 1.3%.

As for China, after the push at the beginning of the year due to the reopening of the country after the covid restrictions, reality has forced a downward revision of three tenths in the 2023 forecast (to 5.1%) and of five tenths by 2024 (at 4.6%).

The slowdown of China, taking into account its weight in the global economy, and even more so its important contribution to growth in recent years, is one of the great reasons for concern and uncertainty at this time.

The OECD improves the forecast for Spain in 2023, the best of the large developed countries

The OECD has revised upwards its growth forecast for Spain this year to 2.3%, above what the Government made in spring and what the European Commission presented last week, and if met it would be the highest figure. high of the large developed countries.

With this improvement of two tenths in the expectations of the Outlook report of the Organization for Economic Cooperation and Development (OECD) compared to those announced in June, Spain’s growth will almost quadruple that of the entire euro zone, which will remain at an anemic 0.6%, three tenths less than before the summer.

For 2024, the authors of the study have kept the figures they presented before the summer unchanged and expect an increase in activity in Spain of 1.9%.

Brazil, favored by the good harvest

The good news within the large emerging countries comes above all from Brazil, favored in particular by good harvests and the price situation in the agricultural sector. Its GDP should rise 3.2% this year (1.5 points more than anticipated in June) and 1.7% next year (5 tenths more).

The other side of the coin is Argentina, for which the OECD’s outlook worsens even more than three months ago and for which it predicts two successive years of recession: -2% in 2023 and -1.2% in 2024, while in June forecast -1.6% this year and a positive 1.1% next year.

As it has done repeatedly since the invasion of Ukraine in February 2022, the OECD recognizes that it had underestimated the resilience of the Russian economy. Now it raises its forecast for 2023 by 2.3 points, a year in which it admits that the Eurasian giant will emerge from the recession and grow by 0.8%. With EFE

Related