The Organisation for Economic Co-operation and Development (OECD) based in Paris has increased its predictions for global economic growth. It now anticipates a 3.1 percent expansion this year and a 3.2 percent growth in 2025. This adjustment is due to the stronger-than-expected growth in the United States and China.
In its latest forecast, the OECD highlighted that global economic activity is on the rise, even though growth remains moderate. The impact of tighter monetary conditions continues to affect areas such as housing and credit markets. However, the organization noted that global activity is proving to be relatively resilient, with falling inflation rates and increasing confidence in the private sector.
The pace of economic recovery varies across different countries, with Europe and many low-income countries experiencing slower growth compared to strong performances in the United States and several large emerging-market economies. Among major economies, the US is expected to grow by 2.6 percent this year and 1.8 percent in 2025, while China is projected to expand by 4.9 percent and 4.5 percent, respectively.
The eurozone is forecasted to achieve 0.7 percent growth this year and 1.5 percent growth in 2025, while the United Kingdom’s outlook has been downgraded to 0.4 percent growth this year and 1 percent growth in 2025.
Despite the improved economic forecast, the OECD warns of “substantial uncertainty” that continues to cloud the global outlook. This includes ongoing geopolitical tensions, particularly in the Middle East, which could disrupt energy and financial markets, leading to increased inflation and reduced growth. Nonetheless, the organization believes that risks are becoming more balanced as the global economic landscape evolves.