The global economy is projected to experience continued growth, albeit at a moderate pace, according to the latest Economic Outlook from the OECD. The report forecasts steady global GDP growth of 3.1% in 2024, matching the figure for 2023, with a slight increase to 3.2% expected in 2025.
This news comes with some caveats. While inflation is projected to gradually decline from 6.9% in 2023 to 5.0% in 2024 and further down to 3.4% in 2025, concerns remain. Tighter monetary policies, implemented to combat inflation, are impacting housing and credit markets.
The growth picture is uneven across regions. The United States is expected to see a slowdown, with growth projected at 2.6% in 2024 and 1.8% in 2025. The Eurozone is anticipated to experience a gradual rebound, with growth at 0.7% in 2024 and 1.5% in 2025.
Meanwhile, Japan is expected to see a steady recovery with GDP growth of 0.5% in 2024 and 1.1% in 2025. China’s growth is predicted to moderate to 4.9% in 2024 and 4.5% in 2025.
The OECD emphasises the need for continued efforts to control inflation, alongside responsible fiscal policies that ensure long-term growth prospects. Investing in areas like education, technology, and infrastructure is seen as crucial for building a more robust future.
However, significant uncertainties remain. Inflation might persist for longer than anticipated, potentially leading to slower interest rate reductions and financial vulnerabilities. Geopolitical tensions also pose a risk to economic activity and inflation.
Despite these challenges, the OECD report offers a cautiously optimistic outlook for the global economy, suggesting a period of steady growth in the coming years.
