Other advanced economies are surpassing Germany in the realm of industrial development.
The economic situation globally is improving with decreasing inflation rates, increasing incomes, and less stringent monetary policies in various nations. However, the OECD's projection for Germany's economic performance is rather pessimistic. Among major industrialized nations, only Germany and Japan are projected to underperform. Germany's GDP growth is estimated at a meager 0.1% this year, as per the recent report published from Paris.
Compared to Germany, Japan's economy is predicted to depreciate by a similar 0.1%. On the positive side, France (+1.1%), Italy (+0.8%), and Spain (+2.8%) are projected to show better growth figures.
Earlier, in May, the OECD had reduced its growth forecast for Germany from the initial 0.3% projected in February to 0.2%. Looking forward to the next year, the organization anticipates a boost in Germany's economy with a growth rate of 1.0%.
Global growth forecast of 3.2%
Both in 2022 and 2023, the OECD predicts a global growth of 3.2%. For the Eurozone, the growth is forecasted at 0.7% and 1.3% respectively. Declining inflation, rising incomes, and less constrained monetary policies in various nations are contributing to this stability.
However, risks persist. Potent geopolitical conflicts and trade disputes could disrupt investments and inflate import costs. Furthermore, the labor market might slow growth at a faster pace than expected. Conversely, higher wages could fuel increased spending, and continuous drop in oil prices could expedite the decline in inflation.
Conducting democracies and market economies, OECD is a coalition of nations, which includes major economies like Germany, US, and Japan, alongside emerging economies such as Mexico and Chile.
Despite the overall global economic growth forecast of 3.2% for both 2022 and 2023, as per the OECD, the economic forecasts for Germany and Japan are less optimistic. Despite a projected boost in Germany's economy with a growth rate of 1.0% next year, its current growth rate of 0.1% is worryingly low, based on recent economic forecasts.
