EDITOR'S NOTE: According to some analysts, we may be lucky enough to avoid a deeper global recession. That’s good news. The bad news, however, is that global growth may slow to a crawl. In other words, we’re not likely to see a strong and robust rebound for some time. What are the factors that led to this? And how long might the world economy be facing slow growth prospects? The upside is that the pace of growth, should we actually avoid a deep recession, will give you plenty of time to assess your investment opportunities and reposition your portfolio. The downside is that you may have to wait a long time to see better returns. Those who hedged inflation early with physical gold and silver are likely in a much better position. And that’s just one reason why steady precious metals allocations are always prudent to maintain regardless of economic conditions.
In new forecasts, the OECD projects that the global economy will avert a recession this year and next and unemployment rates won't skyrocket. That's the good news.
- The bad: Global growth will be low and slow, alongside still-high inflation and tighter money.
Why it matters: Many countries are facing a similar backdrop of tight labor, soaring energy prices and other costs eroding spending power as central banks work aggressively to bring down inflation.
What they're saying: "This is a very, very challenging outlook, and I don't think anyone will take great comfort from a projection of 2.2% global growth [in 2023]," Mathias Cormann, the OECD secretary-general, said at a news conference.
- "We are making very clear that the risks are tilted to the downside."
By the numbers: The global economy will grow 3.1% this year, down from 5.9% in 2021.
- Prices are expected to remain painfully high: Among rich G-20 nations, inflation will top 8% this year before cooling to 6% in 2023.
The intrigue: Some have warned central banks may have acted too aggressively to combat inflation. The OECD, however, doesn't see it that way.
- It pointed to Brazil as an example of a country that "acted decisively" and it's "paying off" in the form of slowing inflation.
- As for the U.S., "we'll start to see the fruits of [the Fed's] policy fairly soon," said Álvaro Santos Pereira, the OECD's acting chief economist.
Originally published by Axios.