OECD Forecasts Global Economic Slowdown in 2024 Amidst Persistent Inflation and Tightening Monetary Policy

The Organisation for Economic Co-operation and Development (OECD) predicts a global economic deceleration in 2024, citing the impact of elevated interest rates curbing persistent inflation and subsequent economic activities.

Despite the current resilience of the world economy, the OECD forecasts a slowdown in global output, with growth expected to pick up only in 2025. The organisation anticipates central banks to aggressively cut borrowing costs in 2025, contributing to a rise in global gross domestic product (GDP) by 2.7 percent in the coming year, slightly down from 2.9 percent in 2023.

The outlook highlights the lasting effects of the COVID-19 fiscal aftermath and escalating energy prices, emphasizing the importance of monitoring key macroeconomic variables, including the US Federal Funds rate, for insights into the direction of the global economy.