OECD lifts global growth outlook as US, China outperform expectations

Paris-based organisation predicts global economy to expand by 3.1 percent this year and 3.2 percent in 2025.

The OECD says ‘substantial uncertainty’ is continuing to cloud the global outlook [Marco Ugarte/AP]Published On 2 May 20242 May 2024

The Organisation for Economic Co-operation and Development (OECD) has upgraded its outlook for the global economy on the back of stronger-than-expected growth in the United States and China.

The global economy is forecast to grow 3.1 percent this year and 3.2 percent in 2025, the Paris-based organisation said on Thursday,

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The revised outlook compares with projections in February of 2.9 percent in 2024 and 3 percent next year.

“There are some signs that the global outlook has started to brighten, even though growth remains modest. The impact of tighter monetary conditions continues, especially in housing and credit markets, but global activity is proving relatively resilient, inflation is falling faster than initially projected and private sector confidence is now improving,” the intergovernmental organisation said.

The OECD said that the pace of recovery diverged widely across countries, “with softer outcomes in Europe and most low-income countries, offset by strong growth in the United States and many large emerging-market economies”.

Among major economies, the US was forecast to grow 2.6 percent this year and 1.8 percent in 2025, up from 2.1 percent and 1.7 percent, respectively.

China, the world’s second-largest economy, was expected to expand by 4.9 percent in 2024 and 4.5 percent next year, compared with 4.7 percent and 4.2 percent, respectively.

The eurozone was expected to hit 0.7 percent growth this year and 1.5 percent growth in 2025, a rise from 0.6 percent and 1.3 percent, respectively.

The outlook for the United Kingdom was downgraded, with growth expected to reach 0.4 percent this year and 1 percent in 2025, down 0.3 percent and 0.2 percent, respectively.

The OECD said “substantial uncertainty” continued to cloud the global outlook, including tensions in the Middle East, although risks were becoming “better balanced”.

“High geopolitical tensions remain a significant near-term adverse risk, particularly if the evolving conflicts in the Middle East were to intensify and disrupt energy and financial markets, pushing up inflation and reducing growth,” it said.

Source: Al Jazeera and news agencies