The Organization for Economic Cooperation and Development expects global GDP growth to weaken in 2024 before recovering in 2025. In the medium term, advanced economies could face a further slowdown, experts warn.
The gloomy outlook comes from monetary policy tightening and interest rate hikes by major central banks. To drive economic growth, economies need a real wage recovery from the inflation shock and lower borrowing costs by central banks, the OECD estimates.
Global growth is set to remain modest until 2025, weighed down by rising geopolitical tensions and uncertainty over global trade prospects. According to the OECD, the world economy is projected to contract by 2.7% in 2024 after expanding by 2.9% this year. In 2025, the global economy is forecast to pick up by 3%.
Earlier, in November 2023, experts from the International Monetary Fund (IMF) proposed a scenario in which the world would split into two separate trading blocs amid trade restrictions and intense competition for commodities. The first would be led by the United States and the European Union, and the second — by Russia and China.