OECD expects slower global growth in 2024 amid China slowdown

The Organization for Economic Cooperation and Development on Tuesday cut its global growth outlook by 0.2 percentage point to 2.7 percent in 2024, reflecting a slowdown in China amid real estate woes.

The downward revision comes as the OECD expects global growth to be "subpar" and "moderate" in 2023 and 2024, citing uncertainty over the negative impacts of aggressive interest rate hikes in major economies like the United States, among other factors.

For 2023, the Paris-based organization slightly upgraded the growth outlook to 3.0 percent from its 2.7 percent estimate in June.

"Uncertainty about the strength and speed of monetary policy transmission and the persistence of inflation are key concerns," the interim economic outlook report said, noting downside risks to the global economy.

"The signs of a slowdown in Chinese economic activity are also a concern given China's importance for global growth, trade and financial markets. High debt and the scale of the ailing real estate sector provide significant challenges," it added.

China's economy saw sharp downward revisions. The world's second-largest economy is now forecast to grow 5.1 percent this year and 4.6 percent in 2024. As of June, the corresponding figures were 5.4 percent and 5.1 percent, respectively.

The end of its "zero COVID" policy had raised hopes for the Chinese economy to rebound, but its recovery has been relatively slow, clouding the outlook for the world economy.

The development comes as central banks in major economies like the United States and Europe have been aggressively raising interest rates to tame inflation at the expense of economic growth.

Japan has been an outlier among the developed nations as the Bank of Japan has been in no hurry to tighten monetary policy. The Japanese economy is expected to grow 1.8 percent this year and 1.0 percent next year, compared with 1.3 percent and 1.1 percent as of June.

The OECD expects stronger U.S. growth at 2.2 percent this year and 1.3 percent in 2024, rather than 1.6 percent and 1.0 percent in the previous report.

Eurozone growth will be 0.6 percent this year and 1.1 percent in 2024, slower than 0.9 percent and 1.5 percent, respectively.

© Kyodo News