According to the OECD forecast, the economy in Germany is unlikely to grow much this year.
(Photo: dpa)
Paris The industrialized nations organization OECD sees the global economy on a slow recovery course. The bottom seems to be over because energy prices and headline inflation are falling, supply bottlenecks are easing and household finances are relatively sound, the Organization for Economic Co-operation and Development (OECD) said in Paris on Wednesday.
In its new economic outlook, the OECD expects global growth of 2.7 percent for 2023, which should accelerate slightly to 2.9 percent in 2024. This will still be well below the average of the ten years before the corona pandemic. There is still a long way to go towards strong and sustainable growth.
According to the OECD forecast, the economy in Germany is likely to stagnate this year and grow by 1.3 percent in 2024. High inflation is reducing income and savings, which is dampening private consumption. The export business will provide decisive impetus for the economic revival: the supply chains are easing and the order backlog is high.
“A significant downside risk is gas prices and potential gas rationing next winter,” the OECD said. An end to the war in Ukraine, on the other hand, would improve economic prospects and depress energy prices. “In order to counteract the shortage of skilled workers, the labor force participation of women and older and low-skilled workers should be increased and education and training improved.”
The OECD warned that those responsible in politics must act decisively in order to bring about stronger and more sustainable growth through economic and structural policy measures.
However, this will be difficult because inflation is still too firmly anchored, debt is too high and production potential is too low. Investing in education and skills is essential to enable people to thrive in tomorrow’s economy and to reap the benefits of higher productivity.
More: Follow the current developments in the energy crisis in the news blog