OECD Upgrades Global Growth Projections for 2024 and 2025. The Organisation for Economic Cooperation and Development (OECD) has raised its projections for global economic growth in 2024 and 2025, indicating a more positive outlook compared to previous months. This upward revision is primarily driven by robust economic activity in the United States (US), supported by faster-than-expected declines in inflation aligning with central bank targets.
According to the OECD’s Economic Outlook released in May 2024, global economic growth for 2024 is forecasted at 3.1%, with a slight increase to 3.2% in 2025. These projections represent an improvement from the February 2024 report, which estimated growth at 2.9% for 2024 and 3% for 2025. The accelerated decline in inflation is seen as a catalyst for major central banks to consider interest rate cuts in the latter half of the year, boosting consumer incomes and economic activity.
Despite these positive trends, the OECD warns that the pace of recovery varies significantly across different regions. While Europe and Japan continue to experience economic sluggishness, the US is witnessing accelerated growth. The OECD has raised its economic growth forecast for the US to 2.6% for this year, up from the previous estimate of 2.1%. However, growth is expected to moderate to 1.8% in 2025, slightly higher than the February estimate of 1.7%.
Furthermore, China’s economic growth outlook has also been revised upwards by the OECD. Growth is projected to reach 4.9% in 2024 and 4.5% in 2025, compared to the previous forecasts of 4.7% and 4.2%, respectively. Despite challenges such as weakness in Germany weighing on the eurozone, the OECD anticipates eurozone growth to increase from 0.7% in 2024 to 1.5% in 2025, driven by lower inflation supporting household purchasing power and potential interest rate adjustments.
In contrast, the OECD has lowered growth expectations for the UK, forecasting growth of only 0.4% this year, down from the previous estimate of 0.7%. These projections highlight the dynamic nature of global economic recovery, shaped by diverse factors impacting different regions. OECD Upgrades Global Growth Projections for 2024 and 2025.
