The global economy is turning the corner as growth remained resilient through the first half of 2024, with declining inflation, though significant risks remain, according to the OECD’s September economic outlook report. Global GDP growth is projected to be 3.2 percent in 2024 and 2025, following 3.1 percent in 2023, with robust growth in trade, improvements in real incomes, and a more accommodative monetary policy in many economies. In addition, headline inflation in the G20 is projected to fall from 6.1 percent in 2023, to 5.4 percent in 2024, and 3.3 percent in 2025.
According to the report, declining inflation provides room for an easing of interest rates, though monetary policy should remain prudent until inflation returns to central bank targets in most G20 economies. “Decisive policy action is needed to rebuild fiscal space by improving spending efficiency, reallocating spending to areas that better support opportunities and growth, and optimizing tax revenues,” Mathias Cormann, OECD secretary-general, said.
The G20 countries’ GDP growths are projected to be at 3.2 percent in 2024 and 3.1 percent in 2025. Specifically, the GDP growth forecast for China is 4.9 percent in 2024 and 4.5 percent in 2025. The OECD expects India to record the highest growth rate with 6.7 percent for 2024 and 6.8 percent for 2025, while Argentina is projected to record negative growth of 4.0 percent in 2024 and then to grow by 3.9 percent in 2025.