Economic Outlook 2024‑2025: A World Trying to Find Its Groove
According to the latest OECD interim report, global growth is hovering stubbornly, but the rhythm isn’t quite the same everywhere. Inflation, meanwhile, remains stubbornly higher than the targets most central banks crave.
Key Takeaways
- GDP Growth: 2.9 % worldwide in 2024, nudging up to 3.0 % in 2025 – basically the same ballpark as the November projection.
- Asia Rules the Show: Most of the world’s expansion will come from Asia, as it did last year.
- Inflation’s Slow Decline: Headline inflation in the G20 drops from 6.6 % (2024) to 3.8 % (2025). Core inflation in advanced economies falls from 2.5 % to 2.1 % over the same period.
Country‑by‑Country Highlights
- United States: 2.1 % growth in 2024, easing to 1.7 % in 2025. Savings hawked during COVID‑19 keep consumer spending alive, and looser monetary conditions help.
- Euro Zone: A sluggish 0.6 % in 2024, with a modest uptick to 1.3 % in 2025 once credit loosens and incomes pick up.
- Japan: Steady 1.0 % growth both years, powered mainly by households and business investment.
- China: 4.7 % in 2024, easing to 4.2 % in 2025. That’s the weakest rate in a quarter‑centennial, thanks to a sluggish property market and the ghost of consumer demand past.
Take on the Future
OECD Secretary‑General Mathias Cormann says the global economy’s been a bit of a bruiser, shrugging off high inflation and tight monetary rules. He expects inflation to snap back to target by the end of 2025 in most G20 economies.
“In the coming year, central banks might start pulling back rates if inflation keeps easing,” he added. “But fiscal minders need to tighten belts, lift the trade engine, and tackle climate change together.”
Challenges on the Horizon
Political tension is still tossing a wrench into the works, especially in the Middle East. The Red Sea tensions are pushing shipping costs higher and delaying deliveries, which could hammer prices in goods sectors and derail the expected upside.
OECD estimates show that a doubling in shipping costs, if it sticks, could add about 0.4 percentage points to consumer price inflation a year later.
Policymakers must keep a keen eye on inflation. While interest rates could start dropping somewhere this year (if disinflation persists), the exact pace will be all about data, varying across borders.
Call to Action
Chief Economist Clare Lombardelli reminds us: “We need a long‑term strategy to make our economies not only stable but truly prosperous. Public finances must stay sharp, but we must also boost productivity and equip the next generation for what’s ahead.”
It’s a lot of work, but the trio of fiscal restraint, trading revitalization, and climate action offers a roadmap that the world can follow. The path isn’t smooth, but with a mix of patience, ingenuity, and a splash of humor, the global economy can find its rhythm again.
