Xi Jinping's China is slowing which poses risk for rest of world: Organisation for Economic Cooperation and Development

While global growth has proven to be more resilient than had been expected so far this year, the Organisation for Economic Cooperation and Development - a club of mainly rich countries - warns momentum will slow late this year and during 2024 as persistent inflation causes monetary policy to remain tight.

"Inflation is projected to moderate gradually ... but to remain above central bank objectives in most economies," the OECD said in its latest economic outlook.

"Core inflation remains persistent, held up by cost pressures and high margins in some sectors."

After reaching 3.3 per cent in 2022, the organisation forecasts global growth to slow to 3 per cent this year - a 0.3 percentage point improvement from its assessment three months ago - before dropping to 2.7 per cent in 2024.

It expects Australia to follow a similar trend, with growth easing from 1.8 per cent this year to 1.3 per cent in 2024, a small 0.1 percentage point reduction from its reckoning in June.

But it thinks high interest rates are working, projecting Australia's headline inflation to drop from 5.5 per cent in 2023 to 3.2 per cent next year, close to the top of the central bank's target band.

The Reserve Bank of Australia has kept interest rates on hold for three months and markets and many economists expect that, under the leadership of new governor Michele Bullock, this will remain the case until well into 2024, when rate cuts may come onto its agenda.

At its most recent rate setting meeting, the central bank board judged that although inflation remained "too high", the effects of a 4 percentage point increase in interest rates were yet to be fully felt.

Among its worries, it noted that the "downside risks to the Chinese economy had increased".

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Its concerns are shared by the OECD, which said the giant Asian economy was beset by weak consumer confidence and "significant ongoing problems in the property market".

It warned that Chinese authorities may struggle to reignite growth as easily as they have in the past.

"The scope for, and effectiveness of, policy support may be more limited than in the past," it said.

"Elevated public debt ... limits the scope for large scale fiscal initiatives and the weakness in the housing market impairs a key channel of monetary policy easing."

It cautioned that a 3 percentage point drop in China's growth could lop up to 1 percentage point off global output.

Treasurer Jim Chalmers said the OECD report showed the global economy was in "an unpredictable place".

The Treasurer said that high interest rates, persistent inflation and China's economic troubles all weighed on the outlook.

"[But], while we expect our economy to slow considerably over the coming year and the unemployment rate to tick up, we enter this period of uncertainty in an enviable position," Dr Chalmers said.

"We have a strong labour market, wages are getting moving again, and we continue to get good prices for what we sell to the world."

He said the government's move to bank most of the revenue windfall from high personal and company tax receipts and lower benefit payments was in line with the OECD's call for countries to rebuild their financial buffers.