OECD Hikes Global Growth Forecast for 2023, 2024

An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as US and Japan, in Xingtai, Hebei province, China May 21, 2019. REUTERS/Jason Lee
An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as US and Japan, in Xingtai, Hebei province, China May 21, 2019. REUTERS/Jason Lee
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OECD Hikes Global Growth Forecast for 2023, 2024

An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as US and Japan, in Xingtai, Hebei province, China May 21, 2019. REUTERS/Jason Lee
An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as US and Japan, in Xingtai, Hebei province, China May 21, 2019. REUTERS/Jason Lee

The global economic outlook has improved from a few months ago as the inflation shock eases but rising interest rates will keep risks high, the OECD said on Friday, hiking its growth forecasts for major economies.

After growth last year of 3.2%, the world economy is on course to expand 2.6% as central bank tightening takes full effect, the Organization for Economic Cooperation and Development said in its interim economic outlook.

The Paris-based organization raised its forecast for global growth from 2.2% in its last Economic Outlook in November, citing a decline in energy and food prices and China's easing of its anti-COVID restrictions.

Looking to next year, global growth was expected to accelerate to 2.9% - compared with a November forecast of 2.7% - as the hit to household incomes from high energy prices faded, Reuters reported.

The OECD forecast that inflation in the Group of 20 major economies would fall from 8.1% last year to 5.9% this year and further decline to 4.5% in 2024 - still well above targets despite interest rate hikes by many central banks.

It said the full impact of higher interest rates was hard to gauge, warning that increased stress for borrowers could translate into losses for some banks, citing the recent collapse of Silicon Valley Bank in the United States as an example.

Setting aside turmoil in financial markets following SVB's failure and continued worries about Swiss lender Credit Suisse, the European Central Bank hiked interest rates by a further half percentage point on Thursday to fight inflation.

The OECD projected that central bank policy rates would peak at 5.25-5.5% in the United States and 4.25% in the euro area and Britain with a decline in inflation possibly allowing for a "mild" easing next year.

The OECD forecast that US economic growth would slow from 1.5% this year to 0.9% next year as higher interest rates cooled demand. With the US labour market holding up better than expected, the forecast for this year was up from 0.5% in November and down from 1.0% for 2024.

Boosted by the easing of anti-COVID measures, the Chinese economy was seen growing 5.3% this year and 4.9% in 2024, up from November forecasts for 4.6% and 4.1% respectively.

The outlook for the euro area had also improved thanks to a drop in energy prices with the 20-nation bloc expected to see growth this year of 0.8% followed by 1.5% in 2024. The OECD had previously forecast 0.5% and 1.4% growth respectively.



Dubai Expects $15.4 Bln in Economic Gains from Metro Blue Line

Sheikh Mohammed bin Rashid at Blue Line Metro groundbreaking ceremony – Asharq Al-Awsat
Sheikh Mohammed bin Rashid at Blue Line Metro groundbreaking ceremony – Asharq Al-Awsat
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Dubai Expects $15.4 Bln in Economic Gains from Metro Blue Line

Sheikh Mohammed bin Rashid at Blue Line Metro groundbreaking ceremony – Asharq Al-Awsat
Sheikh Mohammed bin Rashid at Blue Line Metro groundbreaking ceremony – Asharq Al-Awsat

Dubai expects its newly launched Blue Line metro project to generate more than 56.5 billion dirhams ($15.4 billion) in cumulative economic, social and environmental benefits by 2040, officials said at a groundbreaking ceremony attended on Monday by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

 

The Blue Line represents one of the emirate’s most significant transport infrastructure investments to date and is a cornerstone of the Dubai 2040 Urban Master Plan and the D33 economic agenda aimed at boosting the city’s global competitiveness and quality of life.

 

Spanning 30 kilometers with 14 stations serving nine districts, the Blue Line is expected to serve nearly one million residents by 2040. Authorities estimate it will reduce road congestion by 20% and increase property values along its route by up to 25%.

 

During the ceremony, Sheikh Mohammed approved the design of the Emaar station, which is set to become the world’s tallest metro station at 74 meters high, with a daily passenger capacity of up to 160,000.

 

Mattar Al Tayer, Director-General and Chairman of the Board of Dubai’s Roads and Transport Authority (RTA), said the new line will expand the city’s rail network to 131 kilometers, with 78 stations and 168 trains in operation.

 

Since its launch in 2009, Dubai Metro has transported more than 2.5 billion passengers and now accounts for around 6% of total public transport ridership in the city, according to figures released on Monday.

 

Preliminary studies show the Blue Line will deliver wide-ranging benefits through reduced fuel consumption, lower carbon emissions and improved traffic safety.

 

The line will also provide direct connectivity between Dubai International Airport and key economic, educational and tourism hubs, with travel times ranging from 10 to 25 minutes.

 

Once completed, the Blue Line will become Dubai’s fifth major mass transit initiative, following the Red and Green metro lines, Dubai Tram, and Route 2020.