OECD Raises Global Economic Growth Estimates to 3.2% in 2024/25

The Organization for Economic Co-operation and Development (OECD) has raised its global economic growth estimates as inflation declines and central banks cut interest rates.

The Paris-based organization said global GDP will grow by 3.2% compared to 3.1% in its previous forecast, and sharply raised its forecasts for Brazil, Britain, Russia, Saudi Arabia and Spain.

The organization also called for increasing taxes on real estate and activities with environmental impacts.

“The global economy is starting to turn the corner, with declining inflation and robust trade growth. At 3.2%, we expect global growth to remain resilient both in 2024 and 2025,” OECD Secretary-General Mathias Cormann said. 

“Declining inflation provides room for an easing of interest rates, though monetary policy should remain prudent until inflation has returned to central bank targets. Decisive policy action is needed to rebuild fiscal space by improving spending efficiency, reallocating spending to areas that better support opportunities and growth, and optimising tax revenues." 

"To raise medium-term growth prospects, we need to reinvigorate the pace of structural reforms, including through pro-competition policies, for example by reducing regulatory barriers in services and network sectors.”

“Governments also need to turn the corner on structural reforms,” OECD Chief Economist Álvaro Santos Pereira said. “The pace of regulatory reforms in recent years has been stalling, and in important parts of the economy reform progress came to a standstill. Amid sluggish productivity growth and tight fiscal space, product market reforms that promote open markets with healthy competitive dynamics remain a key lever to reinvigorate growth.”