OECD raises forecast for global economy slightly
Published: Wednesday, Sep 25th 2024, 12:00
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Despite wars and crises, the global economy is proving to be relatively robust. The Organization for Economic Cooperation and Development (OECD) has slightly raised its forecast for global economic growth this year.
The Organization for Economic Cooperation and Development (OECD) is now forecasting economic growth of 3.2% for 2024. In May, it was still forecasting growth of 3.1 percent. The global economy is also expected to grow by 3.2 percent next year, according to the economic outlook published in Paris on Wednesday.
In the eurozone, it expects growth of 0.7% this year. Next year, the economy is likely to pick up by 1.3%. The OECD did not publish any forecasts for Switzerland in its study.
Falling inflation
According to the OECD forecast, falling inflation, rising incomes and a less restrictive monetary policy in many countries are having a stabilizing effect on the economy. However, considerable risks are still seen.
For example, ongoing geopolitical and trade tensions could increasingly affect investments and increase import prices. Growth could also weaken more than expected due to the slowdown on the labor markets. On the other hand, rising wages could also boost spending and a further fall in oil prices could accelerate the decline in inflation.
However, Switzerland's most important trading partner, Germany, is acting as a brake on the eurozone. For the current year, OECD economic experts only expect the country's economy to grow by 0.1%.
The OECD had already lowered its growth forecast for Germany in an interim report in May. Instead of the 0.3% assumed in February, it then assumed growth of 0.2%. For the coming year, the OECD then expects the German economy to gain momentum and grow by 1.0%.
The situation is very different in France and Spain. Here, the OECD has raised its economic forecasts for the current year, in some cases significantly. Spain's gross domestic product is expected to climb by 2.8% this year. Previously, the OECD had expected growth of 1.8%. France is expected to grow by 1.1 percent, which would be 0.4 percent more than in the previous forecast.
Russia defies sanctions
The Russian economy is also continuing to flourish despite Western sanctions due to the war in Ukraine. OECD economists have raised their GDP forecasts for this year by 1.1 percentage points to 3.7%. They do not expect Russian GDP to slow to 1.1% until next year.
The Paris-based Organization for Economic Cooperation and Development (OECD) brings together countries that are committed to democracy and a market economy. In addition to major economies such as Germany, the USA and Japan, emerging economies such as Mexico and Chile are now also members.
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