OECD lifts global growth forecasts for 2024

The Organization for Economic Cooperation and Development (OECD) has lifted its outlook for global growth this year by 0.2 percentage points.

The February interim report of the OECD Economic Outlook puts GDP expanding by 2.9% in 2024, down from 3.1% last year but ahead of the 2.7% predicted in November. The forecast for 3.0% growth in 2025 was left unchanged.

The upgrade was a result of higher expected economic activity in the US following a particularly “buoyant” 2023, the OECD said, helped by higher government spending and strong consumer spending, with households “continuing to run down the excess savings accumulated since the beginning of the pandemic”..

Momentum in the US is expected to ease this year, but lower inflation will strengthen real wage growth and allow monetary policy to be loosened, the OECD said.

The US economy is now estimated to expand by 2.1% this year and 1.7% in 2025, with this year’s forecast being raised from 1.5% previously.

The OECD said it sees a continuation of recent “moderate” growth across member countries, with India and Indonesia growing at the fastest rates over the next two years. The Indian economy is pencilled in to expand by 6.2% and 6.5% in 2024 and 2025, while Indonesian GDP will rise 5.1% and 5.2%, respectively..

“Across countries, clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies,” it said.