The Organization for Economic Cooperation and Development (OECD) said robust activity in the US has helped the global economy grow faster than expected just a few months ago.
According to the updated OECD forecasts, global GDP will grow by 3.1% in 2024 (the previous forecast, presented in February, assumed growth of 2.9%) and by 3.2% in 2025 (previous forecast: +3%).
The OECD reported that a faster-than-expected decline in inflation will boost consumer incomes and allow central banks to begin easing monetary policy in the second half of 2024.
The OECD predicts that US GDP will grow by 2.6% in 2024 (previous forecast: +2.1%) and by 1.8% in 2025 (previous forecast: +1.7%). The OECD also improved its forecast for China's economy, citing fiscal stimulus - GDP is expected to grow by 4.9% in 2024 and 4.5% in 2025, compared with 4.7% and 4.2% respectively in February.
Meanwhile, the eurozone economic growth forecast for 2024 was improved by 0.1% to 0.7%. As for 2025, the OECD expects GDP growth of 1.5% (previous forecast: +1.3%). Britain's outlook was one of the few to be downgraded with the OECD now forecasting only 0.4% this year compared with 0.7% previously. However, the OECD forecasts GDP growth to accelerate to 1% in 2025 (previous forecast: +1.2%), citing the expected easing of monetary policy by the Central Bank starting in the 3rd quarter of 2024.