The Organisation for Economic Co-operation and Development (OECD) has pointed out that global growth has proved resilient, but there are signs of a slowdown.

In its general assessment of the global macroeconomic situation, it said global Gross DP growth is projected to ease to 2.7% in 2024, from 2.9% this year, before edging up to 3% in 2025 as real income growth recovers and policy interest rates start to be lowered.

“A growing divergence across economies is expected to persist in the near term, with growth in the emerging-market economies generally holding up better than in the advanced economies, and growth in Europe being relatively subdued compared to that in North America and the major Asian economies”, it said.

It mentioned that annual consumer price inflation in the G20 economies is projected to continue easing gradually as cost pressures moderate, declining to 5.8% and 3.8% in 2024 and 2025 respectively, from 6.2% in 2023. By 2025, inflation is projected to be back on target in most major economies.

It continued that risks to the near-term global outlook remain tilted to the downside, adding “Heightened geopolitical tensions due to the conflict following the terrorist attacks on Israel by Hamas are a key near-term concern, particularly if the conflict were to broaden. This could result in significant disruptions to energy markets and major trade routes, and additional risk repricing in financial markets that would slow growth and add to inflation”.

On the upside, the OECD said the global economy and financial markets have so far proved relatively resilient to the tightening of monetary policy, and inflation could return to target without a marked growth slowdown or a sharp rise in unemployment.

“A continuation of this pattern would imply better-than-expected growth in 2024 while inflation eases. Growth would also be stronger if households were willing to spend excess savings accumulated during the pandemic, but inflation persistence might also be prolonged”, it added.

Among the emerging-market economies, residential investment has slowed this year in Chile, China, Colombia and South Africa, but has stabilised in Mexico after earlier declines.