PARIS, May 2 — The OECD today raised its forecast for global growth in 2024, boosted by a dynamic recovery in the United States as the eurozone lags behind.
The Paris-based organisation said it now sees this year’s global growth at 3.1 per cent, up from its previous projection of 2.9 per cent in February.
“Cautious optimism has begun to take hold in the global economy, despite modest growth and the persistent shadow of geopolitical risks,” the Organisation for Economic Cooperation and Development said in its latest quarterly report.
But the report noted that “this recovery is unfolding differently across regions” and that “the mixed macroeconomic landscape is expected to persist, with inflation and interest rates declining at differing paces, and differing needs for fiscal consolidation.”
The US economy is now expected to expand 2.6 per cent in 2024, up from the 2.1 per cent previously expected, and faster than last year’s 2.5 per cent.
Chinese growth remains even stronger, with the OECD raising its projection to 4.9 per cent in 2024 compared to the 4.7 per cent previously expected, thanks notably to an expansionary budgetary policy.
However, the OECD sees timid growth of just 0.7 per cent in the eurozone, though that is up from the 0.6 per cent previously expected. It anticipates a slight recovery to 1.5 per cent in 2025, compared to the 1.3 per cent expected in February, thanks to a recovery in domestic demand.
“A recovery in real household incomes, tight labour markets and reductions in policy interest rates are projected to help generate a gradual rebound,” it said.
The OECD cut its 2024 growth forecast for Germany, Europe’s largest economy, to 0.2 per cent from 0.3 per cent previously.
Conversely, the OECD raised its growth forecast for 2024 for France, increasing it to 0.7 per cent from 0.6 per cent, lifted by private consumption.
In Britain, the economy is seen growing 0.4 per cent in 2024 and 1.0 per cent in 2025, slower than what was expected in February, which the OECD blamed on persistent inflation.
Finally, the OECD warned that “high geopolitical tensions, particularly in the Middle East, could disrupt energy and financial markets, causing inflation to spike and growth to falter”. — AFP
