The Organization for Economic Co-operation and Development (OECD) improved its growth outlook for the world’s major economies this year to 2.6 percent, while in November it counted on growth of 2.2 percent. She justified this by the drop in food and energy prices and the easing of measures against the spread of covid-19 in China. But she warned of the fragility of the economic recovery due to high interest rates.
The OECD also predicts that inflation in the Group of 20 major economies will fall from 8.1 last year to 5.9 percent this year and further decrease to 4.5 percent in 2024. This will still be the case despite interest rate hikes by many central banks significantly above their long-term inflation targets.
According to the OECD, the full impact of higher interest rates is difficult to measure. At the same time, the organization warned that increased tension between borrowers could turn into losses for some banks. As an example, she cited the recent collapse of the financial institution Silicon Valley Bank (SVB) in the United States.
