OECD Upgrades Global Growth Forecast Amid Economic Resilience

The global economy has exhibited unexpected resilience in the first half of the year, according to a report released by the Organization for Economic Co-operation and Development (OECD) on March 26, 2024. The OECD highlighted that both industrial production and trade experienced a boost, largely due to advance purchases made in anticipation of higher tariffs. This trend, combined with strong investments in artificial intelligence, particularly in the United States, contributed positively to economic outcomes.

The OECD’s revised outlook for global growth in 2025 is now projected at 3.2%, an increase from the previous estimate of 2.9%. Despite this upgrade, the organization cautions that the overall expansion is expected to decelerate to 3.3% in 2024. The forecast for 2026 remains unchanged at 2.9%, as it anticipates that the effects of front-loading will diminish, alongside the impact of increased tariff rates and ongoing policy uncertainty that may hinder investment and trade.

Economic Challenges and Regional Predictions

While the OECD’s outlook appears optimistic, it also identifies several significant risks that could adversely affect global growth. These include heightened trade barriers, geopolitical tensions, and persistent policy uncertainty. In the United States, the report predicts a slowdown in GDP growth to 1.8% in 2025 and further to 1.5% in 2026. Factors contributing to this decline include the rise in tariffs and a decrease in immigration.

The economic forecast for the Eurozone indicates a growth rate of 1.2% in 2025 and 1% in 2026. This region faces challenges from escalating trade frictions and ongoing geopolitical instability. Meanwhile, China’s economy is projected to cool to 4.9% in 2025 and further down to 4.4% in 2026, largely due to the effects of tariff increases and diminishing fiscal support.

Inflation and Regional Upgrades

Inflation is expected to moderate significantly across most G20 countries, with headline inflation anticipated to drop to an average of 3.4% in 2025 and 2.9% in 2026. This decline is attributed to slowing economic growth and easing pressures in the labor market. Notably, Türkiye’s economic growth outlook has been upgraded to 3.2% for 2025, a revision from the earlier forecast of 2.9%.

As the global economy navigates these evolving circumstances, the OECD’s insights serve as a crucial guide for policymakers and investors alike, highlighting both opportunities and challenges ahead.