In the latest Economic Outlook, OECD has slightly upgraded global growth forecasts, and stressed the need for central banks to maintain restrictive monetary policies to curtail inflation.
OECD now projects global economic expansion at 2.7%, a slight upgrade from its previous forecast of 2.6% in March. The US and China, the world’s two largest economies, saw their growth forecasts for 2023 nudged upwards by 0.1%, to 1.6% and 5.4% respectively.
In Eurozone, growth forecast was modestly bumped up by 0.1 points to 0.9%. However, Germany, the zone’s largest economy, saw a significant downgrade with zero growth now expected. UK, on the other hand, received a boost with OECD predicting 0.3% growth rather than an economic contraction. Japan’s GDP growth forecast was slightly revised down to 1.3%.
Despite the optimistic revisions, OECD chief economist Clare Lombardelli underscored the challenges ahead in a commentary accompanying the report.
“The global economy is turning a corner but faces a long road ahead to attain strong and sustainable growth,” Lombardelli stated. She added, “The recovery will be weak by past standards.”
Highlighting the ongoing inflationary pressures globally, Lombardelli advocated for a continued restrictive monetary stance from central banks. “Central banks need to maintain restrictive monetary policies until there are clear signs that underlying inflationary pressures are abating,” she urged.
US jobless claims dropped to 212k, housing starts, Philly Fed survey
US initial jobless claims dropped -16k to 212k in the week ending May 11, below expectation of 220k. Four-week moving average of initial claims rose 4.75k to 225k. Continuing claims dropped -28k to 1.66M in the week ending May 4. Four week-moving average of continuing claims rose 1.5k to 1.668M.
Building permits rose 0.6% mom to 1.296k annualized rate. Housing starts rose 5.7% to mom to 1.235M.
Philadelphia Fed Business Outlook diffusion index jumped to 16.6 in May, up from 8.5 and beat expectation of 9.0.