The global economy, which has been remarkably resilient this year, is anticipated to weaken next
year as a result of wars, ongoing high prices, and high-interest rates.
According to the Paris-based Organisation for Economic Cooperation and Development, international growth will fall to 2.7 percent in 2024, down from 2.9 percent this year. This would be the slowest calendar-year growth
rate since the epidemic year of 2020.
The OECD predicts that the world’s two largest economies, the United States and China, will slow
next year. The US economy is expected to grow by only 1.5 percent in 2024, down from 2.4 percent
in 2023, as the Federal Reserve’s interest rate hikes — 11 since March 2022 — continue to stifle
growth.
The Chinese economy is anticipated to expand 4.7 percent in 2024, down from 5.2 percent this year,
due to a devastating real estate crisis, rising unemployment, and declining exports. economic
“consumption growth will likely remain subdued due to increased precautionary savings, gloomier
prospects for employment creation, and heightened uncertainty,” according to the OECD.
The 20 countries that share the euro currency are also likely to contribute to a global slowdown.
They have been harmed by rising interest rates and an increase in energy prices as a result of
Russia’s military intervention against Ukraine.
The OECD forecasts eurozone collective growth of 0.9 percent next year, which is a slight improvement over the 0.6 percent growth forecast for 2023. Since early 2020, the world economy has been hit by one shock after another
The eruption of COVID-19, a resurgence of inflation as the pandemic’s recovery showed unexpected strength,
Moscow’s war against Ukraine, and painfully high borrowing rates as central banks acted
aggressively to combat the acceleration of consumer prices. Despite this, economic growth has been
surprisingly resilient.
The OECD anticipated 2.2 percent global growth in 2023 a year ago. That
prediction proved to be overly pessimistic. The group worries that the reprieve may be coming to an
end.
