OECD downgrades Turkey’s growth forecast for 2023

SAFAKNA TURKEY – In its OECD Economic Outlook, March 2023 Interim Report, the Paris-based organization painted a somewhat more optimistic picture of the challenges that policy makers must overcome.

In the report under review, the OECD cut its growth forecast for Turkey this year from 3 percent to 2.8 percent. The forecast for 2024 has been revised to 3.8. The organization, which maintained Turkey’s headline inflation forecast for 2023 at 44.6 percent, cut its core inflation forecast for this year from 45.6 percent to 43.8 percent.

The report recommended that the US Federal Reserve System (FRS) and the European Central Bank (ECB) continue to raise interest rates and not deviate from the course due to the fragility of the global economic recovery and the fragility of the financial system. .

OECD raises global growth forecast to 2.6

Compared to a report published in November last year, the OECD raised its forecast for world economic growth for this year from 2.2 percent to 2.6 percent. However, global economic growth will continue to rise above trend in 2023 and 2024. under It has been warned that the risks are on the downside. The report also notes that in many countries, including the US and the eurozone, further rate hikes are needed.

Saying that price pressures are higher than previously thought due to rising service costs, high profit margins in some sectors and tightening labor markets, the organization said in its report: “Monetary policy should remain restrictive until there are clear signs that the underlying inflationary pressures are being permanently lowered”. statements have been included.

Core inflation forecast for G-20 countries raised to 4 percent

According to its previous report, the OECD changed its growth and inflation forecasts.

Accordingly, the global economic growth forecast for 2023 was raised from 2.2 percent to 2.6 percent, and for 2024 from 2.7 percent to 2.9 percent.

While the headline inflation forecast for 2023 in the G-20 countries was cut from 6 percent to 5.9 percent, core inflation for the developed G-20 countries was increased from 3.8 percent to 4 percent.

In the report, US GDP in 2023 was revised up from 0.5 percent to 1.5 percent, and the core inflation forecast was raised to 3.9 percent from 3.6 percent.

While the eurozone GDP in 2023 was increased from 0.5 percent to 0.8 percent, the core inflation forecast was raised from 4.7 percent to 5.2 percent.