CIBC Private Wealth
May 09, 2024
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The Organisation for Economic Co-operation and Development (OECD) says global economic growth in 2024 is likely to remain the same as it was in 2023. The economic organization believes global economic conditions are improving, but the lingering impact from high inflation and rising borrowing costs might continue to weigh on economic activity. Still, the global economy has proved relatively resilient, and now central banks are looking to loosen monetary policy, which could help stimulate economic activity.
- In its latest Economic Outlook, the OECD projects the global economy to expand by 3.1% in 2024. This would match the 3.1% pace of growth in 2023. The OECD expects growth to pick up marginally in 2025, projecting growth of 3.2%.
- The economic organization says the global economy has proved to be relatively resilient amid tight financial conditions. However, those conditions persist, weighing heavily on housing and credit markets, which will negatively impact economic growth this year.
- The OECD believes central banks will have to tread cautiously if they begin lowering interest rates. Doing so too soon or too quickly could help reignite inflationary pressures. Prudent loosening of monetary policy might help to stimulate economic activity. The OECD also recommended that governments address their debt pressures.
- The OECD projects Canada’s economy to expand by 1.0% in 2024. Growth should pick up in 2025, growing by 1.8%. The US is expected to grow by 2.6% this year, while China might grow by 4.9%, putting it just below the government’s 5% target.
Global economic growth is expected to be relatively muted this year. However, the global economy has proved its relative strength despite tight financial conditions. Looser monetary policy from major central banks as the year progresses could help reignite economic activity.
If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.