The Organization for Economic Cooperation and Development (OECD) expected the global economy to slow next year, affected by interest rate increases and the disappointing outlook for the Chinese recovery.
On the other hand, the OECD said Saudi economic growth was likely to accelerate to 3.1 percent next year, with the real gross domestic product achieving a growth of 1.9 percent in 2023.
According to its latest forecasts issued on Tuesday, the organization said that the annual inflation rate in the Kingdom was expected to remain stable at 2.5 percent this year, and to decline to 2.1 percent in 2024.
Based on the latest data issued by the Saudi General Authority for Statistics (GASTAT), the Kingdom’s economy grew 1.2 percent in the second quarter of 2023 compared to the same period last year. The annual inflation rate fell to 2 percent last August, compared to 2.3 percent in July.
Earlier this month, the International Monetary Fund (IMF) said that the prospects for the Saudi economy were positive, in light of expectations that the Kingdom’s non-oil GDP growth momentum will remain strong.
In contrast to the promising expectations for the Saudi economy, the OECD said that the growth of the US economy would help curb the global slowdown this year, but added that the weakness of the Chinese economy would constitute a greater obstacle in 2024.
The Paris-based organization said: “Global GDP is anticipated to decline after a stronger-than-expected start to 2023, aided by reduced energy prices and China’s reopening.”
It added: “The effects of tighter monetary policy are becoming more apparent, consumer and corporate confidence are declining, and China's recovery is losing steam.”
The organization expected Chinese economic growth to slow from 5.1 percent this year to 4.6 percent in 2024, as momentum from the end of Covid-19 restrictions is fading and the real estate market suffering.
In June, the OECD forecast growth of 5.4 and 5.1 percent in 2023 and 2024, respectively.
The organization lowered growth expectations in the euro zone this year from 0.9 to 0.6 percent, but expected that next year - with Germany's return to growth - it would rise to 1.1 percent, down from a forecast of 1.5 percent in June.
The OECD advised against easing monetary policy prematurely, emphasizing the need for restrictive measures until there are clear signs that underlying inflation pressures have substantially diminished.