The organization worsened the growth forecast for the Euro Zone economy for the present and the coming years
According to the Organization for Economic Co-operation and Development (OECD) interim economic analysis, global GDP growth this year will slow to 2.9% annually in 2024, from 3.1% in 2023, and then recover to 3% in 2025 as financial conditions improve. This is stated in the organization's report.
It is expected that in 2024-2025, like last year, the majority of global growth will be concentrated in Asia.
The forecast for GDP growth in the euro zone this year has been revised to 0.6% per year, and in 2025 – to 1.3% per year (from 0.9% and 1.5% in the November 2023 review ).
The OECD expects the US economy to grow by 2.1% in 2024 and 1.7% in 2025. This will be facilitated by the continued spending of savings accumulated by consumers during the pandemic and the easing of financial conditions.
The US economy is showing strength compared to Europe, where countries face tight monetary policy and shocks caused by rising energy prices in recent years. OECD chief economist Claire Lombardelli told Bloomberg Television.
“We see a mixed picture around the world. European economies are somewhat weaker due to tighter monetary conditions, in particular due to pressure on business activity. In the United States, the situation is stronger,” she said.
China's GDP growth is expected to reach 4.7% this year and 4.2% in 2025.
The organization predicts that inflation will continue to gradually decline due to moderate cost pressures. Underlying inflation in G20 countries is expected to decline from 6.6% this year to 3.8% next year. This number in the G20 advanced economies will decrease to 2.5% in 2024 and 2.1% in 2025.
Regarding the outlook, geopolitical tensions continue to be an important source of uncertainty. Threats to shipping in the Red Sea have led to higher transportation costs and longer delivery times for suppliers. If worsened, these factors could lead to new pressures on prices in the raw materials sectors and compromise the expected cyclical recovery. The organization estimates that the doubling of shipping costs, if continued, will add 0.4 percentage points to consumer price inflation in OECD countries in about a year.
As the GMK Center previously reported, in its January report, the OECD warned that global steel overcapacity was growing again. This increase is expected to be as high as in 2014, at the beginning of the previous steel crisis. The bleak outlook for steel demand and the upward transfer of steel capacity from China to other regions create alarming prospects for the coming years.
