The OECD Raises Its Global Growth Forecast for 2024 to 2.9%

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Following an unexpected new geopolitical shock, global growth is expected to be stronger than in previous OECD (Organisation for Economic Co-operation and Development) forecasts: global GDP is expected to increase by 2.9% compared to the 2.7% estimated in November. The Parisian institution is closely monitoring the Red Sea, a central passage for global trade with around 12% of the traffic. This has been heavily disrupted since mid-November by attacks from rebels in support of the Palestinian cause, leading to a nearly 30% drop in traffic over the past year, according to the International Monetary Fund. This longer and more costly route is expected to impact commodity prices, in addition to the disruptions already affecting production chains in Europe.

“*If it were to persist*,” the rise in maritime transport costs could inflate inflation by 0.4 points within approximately a year in developed countries, the OECD states in its quarterly report. It is precisely due to the slowdown in inflation, coupled with the reduction in central bank interest rates, that a sustainable economic recovery could take place, according to major international institutions.

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