OECD On the impact of China’s economic weakness. The Organization for Economic Co-operation and Development (OECD) indicates that China’s ongoing economic weakness in the latter half of 2023 is the main threat apart from geopolitical risks.
In the OECD Economic Outlook, Interim Report September 2023, the international institution saw a sharper than expected slowdown in China’s economy.
For information, after China opened up following the Covid-19 pandemic, Panda Country’s economic projections continued to be cut. Finally, the OECD estimates that China’s economy will grow 5.1 percent in 2023, 0.5 percent lower than the OECD’s previous forecast.
The agency said weak consumer confidence and significant ongoing problems in the property market, with low sales leading to a lack of liquidity and the risk of default for highly leveraged real estate developers, were key sources of concern. .
OECD On the impact of China’s economic. In the OECD scenario, if in one year China’s domestic demand decreases by around 3 percent, it could directly reduce global GDP growth by 0.6 percent.
This threat is increasingly worrying and has the potential to exceed 1 percent if there is a significant tightening of global financial conditions. This scenario is very likely to occur, assuming China’s household consumption falls by 1 percent, business investment falls by 5 percent, and housing investment falls by almost 8 percent in one year.
Meanwhile, globally the OECD projects GDP growth to remain below average in 2023 and 2024, at 3 percent and 2.7 percent respectively, restrained by the tightening of macroeconomic policies needed to control inflation.