The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices.

<h2>About India’s growth forecast</h2>

According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent.&nbsp;

The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.”&nbsp;

ALSO READ |<a href="https://www.wionews.com/india-news/cancel-culture-to-370-seats-key-takeaways-from-pm-modis-parliament-speech-687202">&nbsp;'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech</a>

India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum.&nbsp;

The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year.&nbsp;

<h2>What about global growth?</h2>

According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast.&nbsp;

Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated.&nbsp;

“The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement.&nbsp;

The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation.&nbsp;

The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent.&nbsp;

<h2>The Middle East factor</h2>

According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures.&nbsp;

Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/federal-reserve-chair-powell-signals-prudence-in-considering-rate-cuts-amid-strong-economy-687124">Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy</a>

“High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report.&nbsp;

Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference.&nbsp;

The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year.&nbsp;

(With inputs from agencies) 
&nbsp;

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well.

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices. About India’s growth forecast According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent. The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.” ALSO READ | 'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum. The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year. What about global growth? According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast. Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated. “The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement. The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation. The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent. The Middle East factor According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures. Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis. ALSO READ | Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy “High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report. Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference. The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year. (With inputs from agencies)

OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'

The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine. The Paris-based organisation reduced the 2023 growth forecast for the global economy to 2.2 percent. Earlier in June, it was estimated to be around 2.8 per cent.

"A number of indicators have taken a turn for the worse, and the global growth outlook has darkened," OCED wrote in their report titled "Paying the price of war".

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The report also said that the COVID-19 pandemic is still affecting global economy in a negative way with banks around the world increasing interest rates to control inflation.

Global growth stalled in the second quarter of this year and data in many economies "now point to an extended period of subdued growth", the OECD said according to AFP.

The forecasts for all economies around the world looked quite grim in the report with Britain not expected to make any growth. United States have a growth of just 0.5 per cent next year.

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-admits-making-mistakes-in-troop-call-up-during-mobilisation-vows-to-fix-issues-519680" hreflang="en">Russia admits making mistakes in troop call-up during mobilisation; vows to fix issues</a>

According to the forecasts, Germany is expected to be the worst-affected country in Europe with chances of recession due to the ongoing energy crisis. The decision taken by Russia to stop gas supply can result in the German economy shrinking by around 0.7 per cent in 2023.

"The effects of the war and the continuing impacts of Covid-19 outbreaks in some parts of the world have dented growth and put additional upward pressure on prices," the OECD said.

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The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine.

The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine. The Paris-based organisation reduced the 2023 growth forecast for the global economy to 2.2 percent. Earlier in June, it was estimated to be around 2.8 per cent. "A number of indicators have taken a turn for the worse, and the global growth outlook has darkened," OCED wrote in their report titled "Paying the price of war". Also read | Pak Army helicopter crashes in Balochistan, killing all six on board The report also said that the COVID-19 pandemic is still affecting global economy in a negative way with banks around the world increasing interest rates to control inflation. Global growth stalled in the second quarter of this year and data in many economies "now point to an extended period of subdued growth", the OECD said according to AFP. The forecasts for all economies around the world looked quite grim in the report with Britain not expected to make any growth. United States have a growth of just 0.5 per cent next year. Also read | Russia admits making mistakes in troop call-up during mobilisation; vows to fix issues According to the forecasts, Germany is expected to be the worst-affected country in Europe with chances of recession due to the ongoing energy crisis. The decision taken by Russia to stop gas supply can result in the German economy shrinking by around 0.7 per cent in 2023. "The effects of the war and the continuing impacts of Covid-19 outbreaks in some parts of the world have dented growth and put additional upward pressure on prices," the OECD said.

OECD cuts 2023 global growth forecast to 2.2 per cent due to Ukraine crisis

The OECD warned Wednesday that the world economy will pay a "hefty price" for Russia's invasion of Ukraine as it slashed its 2022 growth forecast and projected higher inflation.

The Paris-based organisation, which represents 38 mostly developed countries, is the latest institution to predict lower GDP growth due to the conflict, which has sent food and energy prices soaring.

In its latest economic outlook, the Organisation for Economic Co-operation and Development said global gross domestic product would grow by three percent in 2022, down sharply from the 4.5 percent estimated in December.

Also read |&nbsp;<a href="https://www.wionews.com/world/world-bank-lowers-2022-global-growth-forecast-to-29-from-41-in-january-486030">World Bank lowers 2022 global growth forecast to 2.9% from 4.1% in January</a>

The OECD also doubled its forecast for inflation among its members -- which range from the United States to Australia, Japan, and Latin American and European nations -- to 8.5 percent, its highest level since 1988.&nbsp;

"The world is set to pay a hefty price for Russia's war against Ukraine," wrote the OECD's chief economist and deputy secretary-general, Laurence Boone, adding that a "humanitarian crisis is unfolding before our eyes".

"The extent to which growth will be lower and inflation higher will depend on how the war evolves, but it is clear the poorest will be hit hardest," Boone said.

"The price of this war is high and will need to be shared."

Before the war broke out, the outlook had appeared "broadly favourable" for 2022-23, with growth and inflation expected to return to normal after the devastating Covid-19 pandemic, said the OECD.

However, "the invasion of Ukraine, along with shutdowns in major cities and ports in China due to the zero-Covid policy, has generated a new set of adverse shocks," it said.

Food shortage risk

The OECD was supposed to publish its outlook in March, but it delayed its detailed assessment until now due to uncertainty over the war. At the time, it said the conflict could cut global GDP growth by "over one percentage point".

The World Bank revised its own figures on Tuesday, lowering its global growth forecast from 4.1 percent to 2.9 percent. The IMF cut its forecast by nearly one point to 3.6 percent in April.

The OECD cut its growth forecast for the United States from 3.7 percent to 2.5 percent and that of China, the world's second biggest economy, from 5.1 percent to 4.4 percent. The eurozone's GPD is now seen growing by 2.6 percent instead of 4.3 percent while Britain's outlook was lowered to 3.6 percent from 4.7 percent.

The OECD noted that commodity prices had risen, hitting real income and spending, "particularly for the most vulnerable households".

"In many emerging-market economies the risks of food shortages are high given the reliance on agricultural exports from Russia and Ukraine," it said.

The report warned that the "effects of the war in Ukraine may be even greater than assumed", raising as an example a scenario of Russia cutting gas supplies to Europe.

As central banks tighten their monetary policies to counter inflation, the report said sharp increases of interest rates could also hit growth more than anticipated.

Covid risk

The Covid pandemic, meanwhile, could take another turn for the worse.

"New more aggressive or contagious variants may emerge, while the application of zero-Covid policies in large economies like China has the potential to sap global demand and disrupt supply for some time to come," the OECD said.

Faced with these challenges, governments needed to protect the most vulnerable from the economic shockwaves, it added.

Also read |&nbsp;<a href="https://www.wionews.com/videos/kyrgyzstan-endures-soaring-inflation-and-poverty-residents-struggle-to-find-work-486128">Kyrgyzstan endures soaring inflation and poverty, residents struggle to find work</a>

In the short term, "temporary, timely and well-targeted" fiscal measures would help the poorest households, the OECD said.

Over the medium- and long-term, governments would have to invest more in clean energy and defence spending.

"The world is already paying the price for Russia's aggression," wrote Boone.

"The choices made by policymakers and citizens will be crucial to determining how that price will be distributed across people and countries."

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The OECD warned Wednesday that the world economy will pay a "hefty price" for Russia's invasion of Ukraine as it slashed its 2022 growth forecast and projected higher inflation.

The OECD warned Wednesday that the world economy will pay a "hefty price" for Russia's invasion of Ukraine as it slashed its 2022 growth forecast and projected higher inflation. The Paris-based organisation, which represents 38 mostly developed countries, is the latest institution to predict lower GDP growth due to the conflict, which has sent food and energy prices soaring. In its latest economic outlook, the Organisation for Economic Co-operation and Development said global gross domestic product would grow by three percent in 2022, down sharply from the 4.5 percent estimated in December. Also read | World Bank lowers 2022 global growth forecast to 2.9% from 4.1% in January The OECD also doubled its forecast for inflation among its members -- which range from the United States to Australia, Japan, and Latin American and European nations -- to 8.5 percent, its highest level since 1988. "The world is set to pay a hefty price for Russia's war against Ukraine," wrote the OECD's chief economist and deputy secretary-general, Laurence Boone, adding that a "humanitarian crisis is unfolding before our eyes". "The extent to which growth will be lower and inflation higher will depend on how the war evolves, but it is clear the poorest will be hit hardest," Boone said. "The price of this war is high and will need to be shared." Before the war broke out, the outlook had appeared "broadly favourable" for 2022-23, with growth and inflation expected to return to normal after the devastating Covid-19 pandemic, said the OECD. However, "the invasion of Ukraine, along with shutdowns in major cities and ports in China due to the zero-Covid policy, has generated a new set of adverse shocks," it said. Food shortage risk The OECD was supposed to publish its outlook in March, but it delayed its detailed assessment until now due to uncertainty over the war. At the time, it said the conflict could cut global GDP growth by "over one percentage point". The World Bank revised its own figures on Tuesday, lowering its global growth forecast from 4.1 percent to 2.9 percent. The IMF cut its forecast by nearly one point to 3.6 percent in April. The OECD cut its growth forecast for the United States from 3.7 percent to 2.5 percent and that of China, the world's second biggest economy, from 5.1 percent to 4.4 percent. The eurozone's GPD is now seen growing by 2.6 percent instead of 4.3 percent while Britain's outlook was lowered to 3.6 percent from 4.7 percent. The OECD noted that commodity prices had risen, hitting real income and spending, "particularly for the most vulnerable households". "In many emerging-market economies the risks of food shortages are high given the reliance on agricultural exports from Russia and Ukraine," it said. The report warned that the "effects of the war in Ukraine may be even greater than assumed", raising as an example a scenario of Russia cutting gas supplies to Europe. As central banks tighten their monetary policies to counter inflation, the report said sharp increases of interest rates could also hit growth more than anticipated. Covid risk The Covid pandemic, meanwhile, could take another turn for the worse. "New more aggressive or contagious variants may emerge, while the application of zero-Covid policies in large economies like China has the potential to sap global demand and disrupt supply for some time to come," the OECD said. Faced with these challenges, governments needed to protect the most vulnerable from the economic shockwaves, it added. Also read | Kyrgyzstan endures soaring inflation and poverty, residents struggle to find work In the short term, "temporary, timely and well-targeted" fiscal measures would help the poorest households, the OECD said. Over the medium- and long-term, governments would have to invest more in clean energy and defence spending. "The world is already paying the price for Russia's aggression," wrote Boone. "The choices made by policymakers and citizens will be crucial to determining how that price will be distributed across people and countries." WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

OECD doubles 2022 inflation forecast in 38-nation group to 8.5%

The Organization for Economic Co-Operation and Development (OECD) slashed its 2020 global economic growth forecasts

WION Wallet: OECD lowers its global growth forecast to 2.4%

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OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'

OECD cuts 2023 global growth forecast to 2.2 per cent due to Ukraine crisis

OECD doubles 2022 inflation forecast in 38-nation group to 8.5%

WION Wallet: OECD lowers its global growth forecast to 2.4%