OECD raises global inflation forecast

PARIS. Central banks around the world must be steadfast in their inflation fight even though economies will suffer as a result, the OECD has said. The organisation boosted its 2023 inflation estimates and said it expects price increases the following year will remain above the targets set by many global central banks. While economies will slow because of tighter monetary policies, the OECD didn’t forecast a recession.

Though a survey of US manufacturers showed a fifth month of shrinking activity, another report indicated a healthy increase in business investment. A survey of the euro area businesses indicated that any downturn may not be severe as initially expected. Meantime, the Bank of China eased reserve requirements for banks to help bolster the world’s second-largest economy.

Last week saw more major rate hikes across the world, with 75 basis-point hikes in Sweden, New Zealand and South Africa and full percentage-point moves in Pakistan and Nigeria. Turkey went the opposite way, cutting rates by 150 basis points.