Global economic outlook: OECD forecasts growth and inflation trends

In its most recent Interim Economic Outlook, the Organization for Economic Co-operation and Development (OECD) has released findings indicating that global growth maintains stability, albeit with variations among different countries and regions.

The organization's projections suggest that inflation, while still exceeding targets, is expected to ease gradually.

The OECD envisions a global GDP growth of 2.9 percent in 2024, slightly improving to 3.0 percent in 2025. Asia remains the driving force behind this growth, retaining its role as the primary contributor to worldwide economic expansion.

Regarding inflation, the report highlights a gradual reduction in cost pressures. Headline inflation in G20 countries is anticipated to decrease from 6.6 percent in 2024 to 3.8 percent in 2025. Core inflation in G20 advanced economies is forecasted to revert to 2.5 percent in 2024 and 2.1 percent in 2025.

OECD Secretary-General Mathias Cormann acknowledged the global economy's resilience amidst high inflation and stressed the significance of a prudent monetary policy.

Cormann suggested that central banks might consider reducing interest rates in the upcoming year, contingent on inflation continuing to ease. Fiscal policy was also emphasized as critical, with a plea for efforts to restrain spending growth and restore budgetary space.

The report highlights concerns about geopolitical tensions, especially in the Middle East, affecting shipping costs and supplier delivery times.

Moreover, the report underscores the significance of revitalizing global trade to fortify worldwide growth and economic development prospects.

In concluding remarks, OECD Chief Economist Clare Lombardelli stressed the necessity of a longer-term approach to reinforce the foundations for a more sustainable and prosperous global economy.