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Like your group project partner in high school, global growth has no problem letting you down.
According to the Organization for Economic Cooperation and Development’s November economic outlook report, global growth is on track to stay modest this year and into 2024.
While gross domestic product growth has been stronger than anticipated in 2023 so far, it’s now “moderating on the back of tighter financial conditions, weak trade growth and lower business and consumer confidence,” the report’s authors noted.
The OECD anticipates global GDP growth of 2.9% in 2023, and a dip to 2.7% in 2024. 2025 looks better, with predicted global growth of 3%. (Although, at this point, who’s ready to think about 2025?)
In 2023, Asia comprised “the bulk of global growth,” the authors note, and that’s on track to stay the same in 2024 and 2025. China, for instance, is expected to hit GDP growth of 5.2% in 2023, and 4.7% and 4.2%, respectively, in the subsequent years.
For the US, GDP growth of 2.4% is expected in 2023. It’ll likely slow to 1.5% in 2024, before marginally jumping to 1.7% in 2025, “as monetary policy is expected to ease,” the OECD said. And in Europe, where the war in Ukraine and rising energy prices have been acutely painful, GDP growth is especially modest: 0.6% in 2023, 0.9% in 2024, and 1.5% in 2025.
“The global economy continues to confront the challenges of both low growth and elevated inflation, with a mild slowdown next year, mainly as a result of the necessary monetary policy tightening over the past two years,” Mathias Cormann, OECD secretary general, said in a statement tied to the report, adding that “inflation has declined from last year’s peaks.”
If food and energy prices stay relatively stable, the OECD projects headline inflation will “return to levels consistent with central bank targets in most major economies by the end of 2025.”