The Organization for Economic Cooperation and Development (OECD) has made a forecast to slow down world economic growth and identified the causes of this phenomenon. According to the forecast, the global gross domestic product (GDP) will increase by 2.7% in 2024 and 3% in 2025, which is at a lower rate than previous years.
The main reasons for slowing down economic growth include increased monetary policy, weak trade indicators and reducing business and consumer confidence. Against the background of the global inflationary crisis caused by the Covid-19 pandemic and Russia's invasion of Ukraine, this slowdown is a long-term consequence. Central banks respond to this situation with a sharp increase in interest rates, but the effectiveness of such an event is not yet confident.
In terms of inflation, it is expected that in OECD countries it will decrease from 7.0% in 2023 to 5.2% in 2024 and 3.8% in 2025. The OECD emphasized that, despite the overall decrease in inflation, basic prices remain unstable, which requires the continuation of restrictive monetary policy.
The organization also indicated that developing markets in general look more stable than developed economies. Europe is lagging behind the United States, partly due to more sensitivity to interest rates.
OECD Clair Lombardelli's chief economist expressed a careful optimism, emphasizing the need for a further well-considered approach to monetary policy. She noted that the economy may become indefinitely and its recovery is not sure.
Thus, the OECD forecast gives an important view of the prospects of the world economy and recommendations for further action in the monetary and financial sector of national economies.
