OECD Economic Outlook: Stable global growth expected in 2024 and 2025

The global economy shows signs of improvement, although it continues to grow at a “modest pace“, according to OECDwhich predicts a “constant” increase in world GDP 3.1% in 2024 (as in 2023), and 3.2% for 2025.

The data corresponds to Semi-annual report published this Thursday by the Organization for Economic Cooperation and Development (OECD).

“The impact of some monetary conditions further strict continues, especially in the real estate and credit markets, but the global activity is proving to be relatively resistantinflation is falling faster than initially projected and private sector confidence is improving,” the report says.

The OECD also highlighted that imbalances between supply and demand in labor markets are diminishing and the unemployment it keeps at historic lows or near them.

“The real incomes have started to improve as inflation moderates and trade growth turns positive. “Developments continue to diverge across countries, with weaker results in many advanced economies, especially Europe, offset by strong growth in the United States and many emerging market economies.”

It is expected that the general inflation in OECD countries to fall to 5% in 2024, from 6.9% in 2023, and decline further to 3.4% in 2025. By the end of 2025, inflation in the OECD is expected to approach to the 2% target of most central banks. This is likely due to falling energy and goods prices, as well as tighter monetary policies.

The growth forecast for Spain is 1.8% in 2024

The growth of the G20 and other developed nations is likely to lag far behind that of developing nations. It is estimated that the United Kingdom will experience a growth of only 0.4% in 2024and that will increase to 1% in 2025.

The forecasts indicate that the eurozone will experience a 0.7% growth in 2024 and of 1.5% in 2025while France is also likely to see growth of 0.7% this year and 1.3% in 2025.

Spain comes out well and once again stands out from the rest of the large economies in Europe, since the OECD revised upwards its forecasts for the country, with a 1.8% growth for this yearwhile maintaining its forecast of 2% by 2025.

Italy is expected to grow 0.7% this year, jumping to 1.2% in 2025, while for Germanylong considered the “sick man” of Europe, a disappointing performance this yearwith a very modest growth of the 0.2%. However, things could look much more positive for the country on next yearand the OECD expects an increase in 1.1%.

On the other hand, it is expected that India grow to a steady pace of the 6.6% so much for 2024 as for 2025while Indonesia could see an increase of 5.1% in 2024, rising to 5.2% in 2025.

However, it is expected that Chinawhich is still struggling with the lingering effects of an uncertain economy, high cost of living and declining post-pandemic demand, rise a 4.9% this yearbut only one 4.5% next.

In February 2024, the OECD unemployment rate was located in the 4.9%, near its lowest level since 2001.

OECD Secretary-General Mathias Cormann said in a statement: “The global economy has proven resilient, inflation has eased in view of central bank targets and risks to the outlook are becoming more balanced. We expect stable global growth for 2024 and 2025, although growth is expected to continue below its long-term average”.

“The political measures They must guarantee macroeconomic stability and improve medium-term growth prospects. Monetary policy must remain prudent, with room to reduce policy rates as inflation declines, fiscal policy must address growing pressures on debt sustainability, and policy reforms must boost innovation, investment and opportunities in the labor market, particularly for women, young people and older workers,” he added.