Wed Sep 25 09:23:55 UTC 2024: ## Global Economy Stabilizes as Inflation Eases, OECD Says
**Paris, France** – The global economy is showing signs of stability as inflation pressures ease, according to a new report from the Organization for Economic Cooperation and Development (OECD). The Paris-based organization says economic growth has remained resilient in recent months, and inflation has continued to moderate, leading to cautious policy loosening by central banks.
The OECD’s latest outlook maintains a relatively positive outlook for the global economy, with steady or improving growth and moderating inflation. While the organization has made only minor changes to its outlook for most countries, it slightly raised its 2024 global output forecast to 3.2%, expecting a similar pace in 2025. The OECD also projects that inflation will be at target in most G20 nations by the end of 2025.
“The projected outlook is comparatively benign, with steady or improving growth and moderating inflation,” the OECD stated.
Despite this optimistic outlook, the organization urges caution, recommending that central banks adopt a “prudent” approach to interest rate cuts, moving at a slower pace than they did when raising rates in 2022 and 2023. While the US Federal Reserve has made a half-point reduction, other major central banks, including the European Central Bank, Bank of England, and Bank of Canada, have stuck with more traditional 25 basis-point cuts. The Bank of Japan, meanwhile, is currently on a tightening path.
The OECD acknowledges significant risks remaining for the global economy, including geopolitical and trade tensions, weak labor markets that could hinder economic growth, and potential disruptions in the disinflation process that could trigger financial market volatility.
The organization has maintained its 2024 growth forecast for the US at 2.6%, but lowered its 2025 prediction to 1.6% from 1.8%. The euro area’s 2024 and 2025 growth forecasts were also adjusted to 0.7% and 1.3%, respectively.
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