OECD raises 2024 growth forecast to 3.2% from 3.1%

Global growth is in the process of stabilising as the drag from central bank rate hikes fades and falling inflation boosts households' incomes, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday, marginally raising its outlook for this year. The world economy was projected to grow 3.2% both this and next year, the OECD forecast, nudging up its 2024 forecast from 3.1% previously while leaving 2025 unchanged. As the lagged impact of central bank tightening evaporates, interest rate cuts would boost spending going forward while consumer spending benefitted from lower inflation, the OECD said in an update of its latest economic outlook. If a recent decline in oil prices persists, global headline inflation could be 0.5 percentage points lower than expected over the coming year, the Paris-based OECD said. With inflation heading towards central bank targets, the OECD projected that the US Federal Reserve's main interest rate would ease to 3.5% by the end of 2025 from 4.75%-5% currently and European Central Bank would cut to 2.25% from 3.5% now.