In its most recent economic outlook, the Organisation for Economic Co-operation and Development (OECD) raised its forecast for global economic growth in 2024 from 2 previously7% to 29%。This adjustment is based on expectations of a strengthening of US economic activity, especially driven by the particularly "exuberant" dynamism shown in 2023. At the same time, the organization's global economic growth rate will remain at 3 in 20250% unchanged.
The expected growth rate of the U.S. economy in 2024 is up from 15% to 21% and is expected to grow by 17%。The expectation of this growth was supported by low inflation, which boosted wage growth and triggered a cut in interest rates. In addition, the OECD expects major central banks to implement interest rate cuts over the next few years as inflationary pressures ease.
The outlook for the eurozone has deteriorated, mainly due to the slowdown in Germany. The eurozone economy is now expected to grow by just 06%, down from 09%。By 2025, the growth rate is expected to increase to 13%, but this is also lower than the previous 15% expected.
Despite the divergence in the economic outlook for major economies, inflation in both the US and the eurozone has cooled faster than expected since November, while inflation in China has remained unchanged. This paves the way for the expected rate cut, with the Fed expected to act in Q2 and the ECB to follow suit in Q3.
However, the OECD also cautioned that the attack on the Red Sea shipping line could cause a slight increase in inflationary pressures. If the cost of shipping continues, then the annual import inflation in the OECD countries could increase by almost 5 percentage points, which in turn will increase consumer inflation by 0 percent after about a year4 percentage points.
The OECD's upward revision of global growth forecasts reflects an optimistic assessment of the current economic environment, while also highlighting the uncertainty of the global economic recovery. As the global economic landscape continues to change, policymakers and investors around the world need to pay close attention to economic dynamics and adjust their strategies in a timely manner to meet the challenges that may arise in the future.
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