OECD forecasts U.S. economy to slow down next year

By Steve Goldstein

OECD global growth forecast lifted to 3.2% for 2024

The U.S. economy will slow down next year but steer clear of a recession as the Federal Reserve cuts interest rates, a world body forecasted on Wednesday.

The Organization of Economic Cooperation and Development released its twice-a-year global growth outlook. The Paris-based organization's forecast for U.S. growth this year was unchanged at 2.6% as it lowered next year's view by two-tenths to 1.6%.

The OECD forecasts global growth of 3.2% this year, an improvement of a tenth, mostly thanks to boosts to its views of oil-exporting countries Saudi Arabia, Russia and Brazil, as well as a better outlook for the U.K. economy.

"Recent activity indicators suggest ongoing momentum, especially in services sectors. Real wage growth is now supporting household incomes and spending, though purchasing power has yet to fully return to pre-pandemic levels in many countries. Global trade is recovering faster than expected, but shipping costs remain elevated and export orders have recently moderated," the OECD said.

The OECD flagged geopolitical and trade tensions as threats to investment that could raise import prices. It said growth can be derailed as labor markets cool and that if disinflation deviates from its path, financial markets could be disrupted.

   2023  2024  Change from May  2025  Change from May 
   World                  3.1   3.2   0.1              3.2   0 
   G20                    3.4   3.2   0.1              3.1   0 
   Australia              2     1.1   -0.4             1.8   -0.4 
   Canada                 1.2   1.1   0.1              1.8   0 
   Euro area              0.5   0.7   0                1.3   -0.2 
   Germany                -0.1  0.1   -0.1             1     -0.1 
   France                 1.1   1.1   0.4              1.2   -0.1 
   Italy                  1     0.8   0.1              1.1   -0.1 
   Spain                  2.5   2.8   1                2.2   0.2 
   Japan                  1.7   -0.1  -0.6             1.4   0.3 
   Korea                  1.4   2.5   -0.1             2.2   0 
   Mexico                 3.2   1.4   -0.8             1.2   -0.8 
   Türkiye                5.1   3.2   -0.2             3.1   -0.1 
   United Kingdom         0.1   1.1   0.7              1.2   0.2 
   United States          2.5   2.6   0                1.6   -0.2 
   Argentina              -1.6  -4    -0.7             3.9   1.2 
   Brazil                 2.9   2.9   1                2.6   0.5 
   China                  5.2   4.9   0                4.5   0 
   India                  8.2   6.7   0.1              6.8   0.2 
   Indonesia              5     5.1   0                5.2   0 
   Russia                 3.6   3.7   1.1              1.1   0.1 
   Saudi Arabia           -0.7  1     1.2              3.7   -0.4 
   South Africa           0.7   1     0                1.4   0 
   Source: OECD forecast 

-Steve Goldstein

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09-25-24 0510ET

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