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Global economy to grow 3.2 % this year -OECD

 The global economy is demonstrating resilience, as inflation continues to ease and global trade begins to recover, Organisation for Economic Co-operation and Development’s (OECD) 2025 Economic Outlook has outlined.

It said lower inflation was providing a boost to real household income growth and spending, although consumer confidence had yet to recover to pre-pandemic levels in many countries.

“Labour market pressures continue to ease, though unem­ployment generally remains at or near historical lows. Real interest rates remain restrictive, but lower nominal yields have generated some early signs of revival in interest-sensitive housing and credit markets,” it elaborated.

It stated that, “Headline infla­tion has now returned to target in a rising number of advanced and emerging-market economies despite lingering pressures in service sectors.”

It also pointed out that the global Gross Domestic Product growth was projected to be 3.2 per cent this year and 3.3 per cent in 2025 and 2026.

Additionally, it noted that low inflation, consistent employment growth, and a more accommo­dating monetary policy would collectively support demand, even in the face of some mod­erate challenges arising from the essential tightening of fiscal policy in numerous nations.

“Some cross-country differ­ences are likely to persist in the near-term but will fade as solid growth in the United States and Brazil starts to ease and the recovery in Europe gains pace. Buoyant domestic demand in India and Indonesia and the recently announced stimulus measures in China and Japan are expected to support contin­ued strong growth in Asia,” it explained.

Furthermore, it stated that annual consumer price inflation in the G20 countries is expected to moderate to 3.5 per cent and 2.9 per cent in 2025 and 2026 respectively, from 5.4 per cent this year.

“By the end of 2025 or early 2026, inflation is projected to be back to target in almost all major economies”, it added.

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