OECD projects stabilising global growth in 2024 & 2025
The Organisation for Economic Co-operation and Development, OECD is a global policy forum with 38 member countries (Photo: MIG)
The Organisation for Economic Co-operation and Development (OECD), a think tank of the world’s richest countries, has projected a stabilised global GDP growth at 3.2 pc in 2024 and 2025 in comparison to 3.1 pc in 2023. In its latest outlook for the global economy, OECD cited improvements in real income, owing to a steadied decline in inflation in most G20 countries as one of the reasons.
Mathias Cormann
“The global economy is starting to turn the corner, with declining inflation and robust trade growth. At 3.2 pc, we expect global growth to remain resilient both in 2024 and 2025,” says Mathias Cormann, Secretary-General, OECD.
In a press statement, the Paris-based organisation says it now projects headline inflation to ease from 6.1 pc in 2023 to 5.4 pc this year and 3.3 pc in 2025, with core inflation falling to 2.7 pc in 2024 and 2.1 pc in 2025 from 4.3 pc in 2023 in G20 countries.
The organisation predicts a relatively slow GDP growth in leading economies, namely China and the United States. Growth in the United States, the largest economy of the world is expected to fall from 2.6 pc in 2024 to 1.6 pc in 2025. In China, the organisation has projected the growth to ease to 4.5 pc in 2025 from 4.9 pc in 2024.
The OECD has also projected a rise in the Euro area with GDP picking up to 1.3 pc in 2025 from 0.7 pc in 2024 owing to recovering real incomes and improvements in credit availability.
The organisation also highlighted several risks in its reports including geopolitical tensions in the Middle East and tightening monetary policies which could disrupt the financial markets and risk pushing up the inflation.
The statement adds that governments need to focus on structural reforms, optimising revenues and containing spending growth amongst other elements to reinvigorate growth and help stabilise debt burdens.
