The Organisation for Economic Co-operation and Development (OECD) offers most recent forecast for the global economy in its May report on Economic Outlook. Over the next two years it expects:
- Global growth will stabilise, but the recovery is precarious. The growth rate will be steady at 3.1% in 2024, before slightly recover to 3.2% in 2025. The disparity between economies is projected to remain in the short term but decrease as Europe's recovery solidifies and growth slows in the United States, India, and many other emerging-market nations. The overall risks to the outlook are becoming more balanced, but relatively high geopolitical tensions remain a big short-term negative risk.
- GDP growth in Australia is projected to slow to 1.5% in 2024, then modestly rise to 2.2% in 2025. In coming year, households and businesses will continue to experience a decline in their expenditure as a result of the increased interest rates. The demand for Australian exports would also be weakened if the Chinese economy experiences a more abrupt decline than anticipated.
- Headline inflation in the Euro area is expected to decline from 5.4% to 2.3% in 2024, and ease back towards 2.2% across 2025. The inflation in US is projected to set back 2.4% in 2024 and 2.0% in 2025. Most major economies' inflation rates are expected to return to target by the end of 2025. Further inflation reductions may be slower than expectations if cost pressures and margins remain high especially in services. This might lead to slower-than-expected cuts in interest rates, exposing financial vulnerabilities and perhaps causing a worse slump in employment markets.
- Australia’s headline inflation is projected to fall from 5.6% to 3.4% in 2024, and to 2.9% in 2025. Compared to the peer economies, inflation in Australia is likely to be stickier and the monetary policy is expected to remain restrictive in the short term to tame stubborn services inflation.
Read the OECD’s Economic Outlook Report for May 2024 here.
OECD Economic Outlook, selected countries (May 2024)
|
|
|
2023 actual
|
2024 forecast
|
2025 forecast
|
|
Real GDP growth, %
|
World
|
3.1
|
3.1
|
3.2
|
|
|
G20
|
3.4
|
3.1
|
3.1
|
|
|
United States
|
2.5
|
2.6
|
1.8
|
|
|
Euro area
|
0.5
|
0.7
|
1.5
|
|
|
Australia
|
2.0
|
1.5
|
2.2
|
| |
|
|
|
|
|
Headline Inflation, %
|
G20
|
6.3
|
5.9
|
3.6
|
|
|
United States
|
3.7
|
2.4
|
2.0
|
|
|
Euro area
|
5.4
|
2.3
|
2.2
|
| |
Australia |
5.6
|
3.4
|
2.9
|
