The outlook projects global GDP growth of 2.9 per cent in 2023, followed by a mild slowdown to 2.7 per cent in 2024 and a slight improvement to 3.0 per cent in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has in 2023.
Consumer price inflation is expected to continue to ease gradually back towards central bank targets in most economies by 2025, as cost pressures moderate. Consumer price inflation in OECD countries is expected to decline from 7 per cent in 2023 to 5.2 per cent in 2024 and 3.8 per cent in 2025.
The latest OECD Economic Outlook projects global GDP growth of 2.9 per cent in 2023, followed by 2.7 per cent in 2024 and 3 per cent in 2025.
Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has in 2023.
Consumer price inflation is expected to ease gradually back towards central bank targets in most economies by 2025.
GDP growth in the United States is projected at 2.4 per cent in 2023, before slowing to 1.5 per cent in 2024, and then picking up slightly to 1.7 per cent in 2025 as monetary policy is expected to ease.
In the euro area, which had been relatively hard hit by Russia’s war of aggression against Ukraine and the energy price shock, GDP growth is projected at 0.6 per cent in 2023, before rising to 0.9 per cent in 2024 and 1.5 per cent in 2025.
China is expected to grow at a 5.2 per cent rate this year, before growth drops to 4.7 per cent in 2024 and 4.2 per cent in 2025 on the back of ongoing stresses in the real estate sector and continued high household saving rates.
“Over the longer term, our projections show a significant rise in government debt, in part as a result of a further slowdown in growth. Stronger efforts are needed to rebuild fiscal space, also by boosting growth. To secure stronger growth, we need to boost competition, investment and skills and improve multilateral co-operation to tackle common challenges, like reinvigorating global trade flows and delivering transformative action on climate change,” OECD secretary general Mathias Cormann said in a release.
Geopolitical tensions remain a key source of uncertainty and have risen further as a result of the evolving conflict following HAMAS attacks on Israel. Amid heightened geopolitical tensions and a longer-term decline in the trade intensity of growth, the anticipated cyclical pick-up in trade growth could fail to materialise.
On the upside, stronger consumer spending could push up growth if households make greater use of the savings accumulated since the COVID-19 pandemic, though this could also increase the persistence of inflation.
Fibre2Fashion News Desk (DS)
