OECD economic outlook: global growth steady but modest, challenges remain

Despite continued challenges, such as tighter monetary conditions and supply-demand imbalances, there are encouraging signs of resilience and improvement. Key highlights from the report include:

• Global activity is proving relatively resilient, with inflation falling faster than expected and private sector confidence on the rise.
• Supply and demand imbalances in labor markets are easing, leading to record-low unemployment rates in many countries.
• Real incomes are improving as inflation moderates, and trade growth has turned positive.
• However, growth continues to vary across countries, with softer outcomes in many advanced economies, particularly in Europe, offset by strong growth in the United States and emerging markets.

Inflation in OECD countries is projected to decline to 5% in 2024 and further to 3.4% in 2025, nearing central bank targets. This is attributed to factors such as decreasing energy and goods prices, along with more rigid monetary policies.

While major European economies like the UK, France, Italy, and Germany are expected to experience modest growth in the near term, developing nations like India and Indonesia are projected to maintain steady growth rates. China, facing challenges including an uncertain economy and high living costs, is expected to see slower growth compared to previous years.

OECD Secretary-General Mathias Cormann emphasized the importance of policy action to ensure macroeconomic stability and enhance medium-term growth prospects. Recommendations include prudent monetary policy, fiscal measures addressing rising debt pressures, and policy reforms to stimulate innovation, investment, and labor market opportunities, particularly for marginalized groups.

Despite ongoing uncertainties, the OECD remains cautiously optimistic about the global economic outlook, emphasizing the need for coordinated efforts to navigate challenges and foster sustainable growth.