February 16, 2024
The Organisation for Economic Co-operation and Development's (OECD) latest Interim Economic Outlook indicates that global growth is holding up, while the pace of growth remains uneven across countries and regions, and inflation is still above targets.
The Outlook projects global GDP growth of 2.9% in 2024 and a slight improvement to 3.0% in 2025, broadly in line with the previous OECD projections from November 2023. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it did in 2023.
Inflation is expected to continue to ease gradually, as cost pressures moderate. Headline inflation in G20 countries is expected to decline from 6.6% in 2024 to 3.8% in 2025. Core inflation in the G20 advanced economies is projected to fall back to 2.5% in 2024 and 2.1% in 2025.
The Outlook highlights a range of challenges. Geopolitical tensions remain a key source of uncertainty and have risen further as a result of the evolving conflict in the Middle East. Threats to shipping in the Red Sea have increased shipping costs and lengthened supplier delivery times. In case of an escalation, these factors could result in renewed price pressures in goods sectors and put the anticipated cyclical pick-up at risk.
The OECD estimates suggest that a doubling in shipping costs, if persistent, would add 0.4 percentage points to consumer price inflation in the OECD after about a year.
Source: OECD