OECD Sees Global Growth Stabilising at 3.2% This Year

The Organisation for Economic Co-operation and Development (OECD) has recently released its Economic Outlook, projecting a steady global GDP growth rate of 3.2% for 2024. This outlook is driven by the resilience of the global economy, which has proven capable of weathering tight monetary conditions and moderating inflation. The OECD's projections highlight the importance of monetary policy adjustments and private sector confidence in shaping the global growth trajectory.


Monetary policy adjustments, particularly by the Federal Reserve (Fed) and the European Central Bank (ECB), play a crucial role in the OECD's growth projections for 2024. The OECD expects the Fed to cut interest rates to 3.50% by the end of next year, while the ECB is anticipated to lower its deposit rate to 2.25% by the end of 2025. These adjustments reflect the central banks' efforts to contain inflation and support economic growth.

The OECD's assessment of inflation trends and private sector confidence also influences its global growth projections. The organisation projects headline inflation in the OECD to gradually ease from 6.9% in 2023 to 5.0% in 2024 and 3.4% in 2025. This decline in inflation, coupled with improving private sector confidence, contributes to the overall stability of global growth.


However, the OECD also highlights key risks and uncertainties that could impact the stability of global growth in 2024. Inflation may stay higher for longer, leading to slower-than-expected reductions in policy interest rates and further financial vulnerabilities. Growth could disappoint in China due to persistent weakness in property markets or smaller-than-anticipated fiscal support. High geopolitical tensions, particularly in the Middle East and the Red Sea, also pose significant near-term risks to activity and inflation.

In conclusion, the OECD's projections for major economies, such as the US, China, and the Eurozone, contribute to the overall global growth outlook by providing a comprehensive assessment of the economic landscape. Monetary policy adjustments, inflation trends, and private sector confidence are critical factors shaping the global growth trajectory. Investors should monitor these developments and consider the potential risks and opportunities when making investment decisions.