Bulgaria's Eurozone Aspirations: Fitch Ratings Affirms Positive Outlook
Fitch Ratings, a leading credit rating agency, has affirmed Bulgaria's Long-Term Foreign-Currency Issuer Default Rating at 'BBB' with a Positive Outlook
The Organization for Economic Co-operation and Development has forecast a weak global economic recovery from the shocks caused by the coronavirus pandemic and the Russian invasion of Ukraine, due to persistently high inflation and the associated restrictive policies of leading central banks seeking to contain price pressures by raising interest rates.
In its latest economic outlook released on Wednesday, the OECD expected global growth to slow to 2.7% in 2023 from 3.3% a year earlier, a slight upward revision from the Paris-based organization's previous estimate for an expansion of 2.6 percent in the current year.
For 2024, the OECD continues to forecast that global gross domestic product will grow by 2.9 percent.
However, the expected economic recovery this year and next would be below the average growth of 3.4% in the last few years before the Covid-19 pandemic.
The US, the Eurozone and China will see a relative slowdown in their economic recovery as inflation will be stronger than in the period up to 2019, the OECD report said.
The organization expects the US GDP to grow by 1.6% this year and by 1% in 2024, the Eurozone - by 0.9% and 1.5% respectively, China - by 5.4% and by 5 .1%, Great Britain - by 0.3% and 1.0% and Japan - by 1.3% in 2023 and 1.1% in 2024, respectively.
At the same time, inflation in OECD member countries is expected to reach 6.6% in 2023, before slowing to 4.3% in 2024, with annual inflation in major advanced economies expected to be slightly above 2.25% only by the fourth quarter of next year.
The inflationary situation poses problems for central banks as they must continue to respond to underlying price pressures that are proving stronger than expected while not hurting economic growth too much, the OECD noted.
"The global economy is emerging from the crisis, but it has a long way to go to achieve strong and sustainable growth," said Clare Lombardelli, chief economist of the organization, Bloomberg reported. "Policymakers must mitigate the impact of a series of negative shocks on the global economy and face a complex set of challenges in doing so," she added.
A day earlier and the World Bank warned that the global economy is in a precarious state and will see a significant slowdown in growth later this year in view of the negative effect of interest rate hike policies.
The world's main monetary authorities face imminent decisions on whether to halt or continue the fastest rate-hiking cycle since the 1980s, with back-to-back regular meetings of the US Federal Reserve and the European Central Bank coming up next week.
In this regard, the OECD noted that previous interest rate hikes were already affecting property and financial markets in particular, but that their full effect would not emerge until later this year and into 2024. The organization said there was uncertainty about the strength of this impact, while inflation may still continue to be more resilient than expected.
The Paris-based organization urged central banks to remain accommodative and even raise rates further if necessary until there are clear signs that underlying inflationary pressures have been permanently eased. The OECD said authorities should make full use of liquidity tools if tighter policies create market stress, and that governments in emerging markets could temporarily implement currency interventions or capital controls to avoid serious risks to stability.
To help central banks limit the extent of demand-side pressure on inflation, governments should provide fiscal support to households, but better target the most vulnerable, the OECD said.
Figures from the organization show that aid to mitigate energy costs is still substantial in Europe and largely untargeted, thus putting additional pressure on public finances already carrying greater debt burdens following the coronavirus pandemic.
Follow Novinite.com on Twitter and Facebook
Write to us at editors@novinite.com
Информирайте се на Български - Novinite.bg
We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!
Tragedy struck the Ukrainian port city of Odesa as Russia unleashed a devastating assault, claiming the lives of five people and leaving over 30 injured
Chinese President Xi Jinping is embarking on a six-day tour of Europe amidst escalating trade tensions with the European Union and concerns over China's support for Russia. The trip, Xi's first to the continent since 2019, includes visits to France, Serbi
During the World Economic Forum, United States Secretary of State Anthony Blinken raised concerns over Russia's unprecedented pace of weapon production, comparing it to historical records, including the Cold War era of the USSR.
A recent report by a group of Western insurers has shed light on Russia's ability to circumvent Western oil sanctions, revealing that measures aimed at capping Russian oil prices have proven ineffective and have inadvertently fueled a surge in gray zone a
The impending enforcement of the new mobilization law, slated to target all able-bodied men between the ages of 25 and 59, has instilled a sense of dread and desperation among Ukrainians
A devastating Russian rocket attack on an educational institution in the picturesque seaside park of Ukraine's Black Sea port, Odesa, has left a trail of destruction and claimed the lives of four individuals
UN Happiness Report: Bulgaria's Astonishing Leap in Rankings
Bulgaria: 3 Regions With Lowest Life Expectancy - EU Report 2022