Australia’s economy may be performing better than those of Europe and the United States, but it is not immune to the bleak global outlook.
The Organization for Economic Co-operation and Development’s interim economic projection predicts that global growth would slow from three percent in 2022 to 2.25 percent in 2023.
Underpinning these projections is a great deal of uncertainty, with the worst-case scenario seeing severe fuel shortages severely impacting European economies and slicing another 0.5 percentage points off global growth in 2023.
The research highlighted Australia’s relatively robust GDP score, but waning demand for exports such as natural resources may cause growth to slow.
Australia’s and the world’s economic growth estimates have been lowered by the OECD. A waitress is depicted delivering meals.
‘Japan, Korea, and Australia have somewhat higher growth momentum than Europe and the United States at present, but this is expected to decline over the next several quarters due in part to weaker foreign demand,’ the research stated.
The OECD assessment reduced Australia’s economic outlook compared to June projections, expecting real GDP growth of 4.1% in 2022 and 2.0% in 2023.
The core inflation rate in Australia is projected to reach 5.4% in 2022, before decreasing to 4.3% in 2023.
Treasurer Jim Chalmers acknowledged that Australia was not immune to the global economic problems.
He stated, “The OECD research indicates that the world economy is traversing treacherous terrain, with declining global growth, high inflation, decreasing real wages, and tremendous uncertainty.”
These difficulties are rising, not diminishing, and Australia is not immune to this darker, more perilous global perspective.
Australia is not immune to “darker and more dangerous” times, according to Federal Treasurer Jim Chalmers (pictured), after the OECD reduced the country’s economic outlook.
However, Dr. Chalmers stated that there were reasons to be positive about the economy’s long-term prospects.
He stated that his first budget, coming in October, will emphasize “responsible” cost-of-living relief.
The OECD research cautions nations against giving short-term help for the cost of living that would fuel inflation.
The report acknowledges that assistance will likely be required for those suffering with high energy expenses.
The report stated, “However, this should be transitory, concentrating on the most vulnerable, keep incentives to reduce energy consumption, and be discontinued as energy price pressures subside.”
The research highlighted Australia’s relatively robust GDP score, but waning demand for exports such as natural resources may cause growth to slow. Featured is a Sydney tradesman
Food security is a major worry for the global economy, and climate change-induced extreme weather events are projected to exacerbate the situation.
Since Russia’s invasion of Ukraine, a gloomy examination of the health of the global economy finds widespread inflation in a number of economies.
The report states, “The repercussions of the conflict and the ongoing implications of COVID-19 outbreaks in some regions of the world have dampened growth and exerted extra upward pressure on prices, particularly for energy and food.”
However, growing energy costs and labor shortages are projected to decrease the rate of decline.
In 2023, the OECD predicts that headline inflation would decline from 8.2% to 6.5% among the G20 nations, which includes Australia.