OECD Economic Outlook: Interim Report September 2024

Turning the corner

Global growth remains resilient and inflation has further declined

High-frequency activity indicators from July to August suggest ongoing growth momentum overall. Business surveys continue to point to stronger activity in services than in manufacturing sectors. While consumer confidence remains subdued relative to long-term trends, survey indicators suggest that confidence is improving in Europe and emerging-market economies. Headline inflation has continued to fall this year in most G20 countries.

Growth is expected to stabilise

Global growth is expected to stabilise over the projection period at 3.2% in both 2024 and 2025, broadly in line with the average pace observed through the first half of this year. Growth was robust in the United States, the United Kingdom, Canada and Spain. Domestic demand has buoyed activity in Brazil, India, and Indonesia.

Inflation has continued to decline

Headline inflation has continued to decline in most OECD countries, partly due to further declines in food price inflation and low, or negative, energy and goods price inflation. As a result, inflation is now at or close to target in about four-fifths of OECD economies. Nonetheless, services price inflation is still proving sticky and has abated only slowly.

Headline inflation in the G20 is projected to fall from 6.1% in 2023, to 5.4% in 2024, and 3.3% in 2025. Core inflation in the G20 advanced economies is anticipated to ease from 4.2% in 2023 to 2.7% in 2024 and 2.1% in 2025. Inflation in the emerging-market economies is projected to remain generally higher than in the advanced economies, while also easing gradually, however with exceptions.

Pressures on labour market are easing

Labour market pressures have continued to ease. The number of job vacancies has fallen steadily from peak levels observed during the pandemic. Survey measures of labour shortages have also continued to moderate in many major advanced economies. Unemployment has risen since the beginning of 2024 in the United States, Canada, Türkiye, India and South Africa. In part this reflects moderating demand, but rising labour supply has also been a key element, often reflecting stronger immigration flows.