NextGen Day

According to the Organization for Economic Cooperation and Development (OECD), monetary tightening in advanced nations to combat inflation will likely cause global economic growth in 2023 to fall to 2.2 percent from the 2.8 percent predicted earlier.

The OECD’s economic outlook study suggested that Japan will grow by 1.4 percent next year rather than the 1.8 percent increase anticipated in June, even if the Bank of Japan is not hurrying to change its ultra-low rate policy.

The second quarter of 2022 saw a slowdown in global economic development as a result of rising costs for food, fuel, and other basic materials as a result of Russia’s conflict with Ukraine.

According to the OECD, a protracted period of “subdued growth” is anticipated, along with the possibility of further monetary tightening in important economies.

The OECD stated that although growth in the third quarter was likely good, supported by a rebound in China, several indicators have changed for the worse, and the prognosis for global growth has grown gloomier.

The economies of the United States and Japan are projected to expand at rates lower than previously predicted this year, namely 1.5 percent and 1.6 percent, respectively.

China, the second-largest economy in the world, will see growth pick up to 4.7 percent next year from 3.2 percent this year, though at a slower rate than originally anticipated.

The OECD predicts that the eurozone’s GDP will expand by 3.1% this year before abruptly slowing to just 0.3% in 2012.

Prices have been increasing, which has hurt Europe because of its heavy reliance on Russian energy.

Though the rate of increase has varied, accelerating inflation has been a worry for policymakers worldwide.

According to the estimate, inflation would increase by 6.2 percent this year and 3.4 percent the following year in the US, where the Federal Reserve has been rapidly hiking interest rates.

The headline inflation forecasts for Japan from the OECD were both modestly upgraded from June predictions of 2.2 percent this year and 2.0 percent the next year.

The BOJ believes that the current cost-push inflation won’t endure for very long. Governor Haruhiko Kuroda anticipates that core consumer inflation, excluding volatile fresh food items, would fall below its 2 percent target in the upcoming fiscal year starting in April.

According to the Interim Economic Outlook report, inflation in the euro area is expected to rise by 8.1 percent and 6.2 percent the next year.

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