After years of battling soaring inflation, it appears the global economy is finally entering a period of stabilization. The OECD reports that economic growth is holding steady, and inflation is gradually easing—giving central banks some much-needed breathing room. But is this the calm before the next storm?
The OECD forecasts a modest bump in global GDP growth to 3.2% in 2024, just a slight increase over earlier projections. Growth in 2025 is expected to continue this tepid upward trend. Central banks, led by the U.S. Federal Reserve, are cautiously cutting interest rates. But don’t pop the champagne just yet. The OECD warns that this newfound stability is fragile at best.
Geopolitical tensions, labor market disruptions, and an unpredictable disinflation process could still wreak havoc on financial markets. So, while central banks celebrate their “victory” over inflation, they may be walking a tightrope with a recession waiting on the other side.