Oliver Mangan: The impact of tighter monetary policy is becoming increasingly visible

The OECD says that the primary reason for the subdued global growth outlook is the substantial monetary policy tightening required to rein in inflation.

Business and consumer confidence have turned down, and the rebound in China has faded.

The latest quarterly update from the OECD on the outlook for the global economy was published last week. In a downbeat assessment, it notes that the impact of tighter monetary policy is becoming increasingly visible, business and consumer confidence have turned down, and the rebound in China has faded. 

Thus, although there was a stronger-than-anticipated start to 2023, helped by lower energy prices, this is not expected to be sustained. GDP growth in 2023 and 2024 is projected to be sub-par, at 3.0% and 2.7%, respectively. Not only that, the OECD says the risks to the outlook remain tilted to the downside.