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GLOBAL ECONOMIC PROSPECTS IMPROVE, OECD NOTES

May 8, 2024
market dynamics

Global economic prospects improve. Recent OECD data indicates modest growth. Despite tighter monetary policies impacting housing and credit, global activity remains resilient. Falling inflation is also boosting private sector confidence.

OECD Economist Highlights Positive Economic Trends

“Inflation’s decline is raising real incomes and unemployment remains low,” says the OECD’s lead economist. He notes that a balanced labor market and improving trade are bolstering these trends.

Global GDP Expected to Stabilize by 2025

A 3.2% global GDP growth rate is anticipated for 2025, amidst global challenges. “This rate matches our potential growth projections for both developed and emerging markets,” the economist adds.

Challenges and Opportunities in 2023 Inflation Trends

Restrictive monetary policies and lower energy costs reduced 2023 inflation. Yet, the economist points out, services sector inflation remains high.

AI Could Significantly Boost Productivity

The OECD sees AI as a catalyst for productivity and innovation. “AI’s economic impact will hinge on its widespread adoption and labor productivity enhancement,” the economist states.

Advice for Policymakers from the OECD

Cautious monetary policies should continue, but there may be room to lower rates as inflation eases. Strong fiscal policies are essential to manage debt and address economic challenges.

OECD Advocates for Stronger Structural Policies

To ensure long-term growth and improved living standards, investing in innovation, technology, and skills is essential. “These efforts are key for a sustainable, green transition,” the economist concludes.