The
global economy would maintain the 3.1% growth rate seen last
year and pick up marginally to 3.2% next year, the Organization
for Economic Cooperation and Development said, upgrading
forecasts dating from February for growth of 2.9% this year and
3% in 2025.
A faster than expected fall in inflation set the stage for major
central banks to begin rate cuts in the second half of the year
while also fuelling gains in consumers' incomes, the OECD said
in its latest Economic Outlook.
However, the speed of recoveries diverged widely, the OECD
warned, saying lingering sluggishness in Europe and Japan was
being offset by the United States, whose growth forecast was
hiked to 2.6% this year from a previous estimate of 2.1%.
Next year U.S. growth was expected to cool to a rate of 1.8%, up
slightly from 1.7% in February.
Boosted by fiscal stimulus, China's economy was also expected to
grow faster than expected with its growth now forecast at 4.9%
in 2024 and 4.5% in 2025, up from 4.7% and 4.2% respectively in
February.
While weakness in Germany would continue to weigh on the broader
euro zone, the bloc's growth was projected to pick up from 0.7%
this year to 1.5% next year as lower inflation boosts
households' purchasing power and paves the way for rate cuts.
The OECD had previously forecast euro zone growth of 0.6% this
year and 1.3% in 2025.
Britain's outlook was one of the few to be downgraded with the
OECD now forecasting only 0.4% this year compared with 0.7%
previously. As interest rates start coming lower from the third
quarter of this year, UK growth was seen picking up to 1% in
2025, compared with 1.2% expected in February.
Meanwhile, in Japan, income gains, easy monetary policy and
temporary tax cuts would help its growth rate to accelerate from
0.5% in 2024 to 1.1% in 2025, compared with forecasts of 1% for
both years previously, the OECD said.
(Reporting by Leigh Thomas; editing by Philippa Fletcher)
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