PARIS (Reuters) – High geopolitical tensions pose a significant short-term risk to activity and inflation, particularly if conflict in the Middle East were to disrupt energy markets, the OECD said on Monday in an update of its economic projections.
The Organization for Economic Cooperation and Development is targeting global gross domestic product (GDP) growth of 2.9% this year, after 3.1% last year, and against a previous forecast of 2.7%. It should rebound in 2025 to 3.0%.
Recent indicators point to some moderation in growth as the effects of tighter financial conditions continue to be felt in credit and housing markets, and as global trade remains subdued, explains the OECD.
Ship attacks in the Red Sea have sharply increased shipping costs and lengthened delivery times, disrupting production schedules and increasing pricing pressures.
The institution thus estimates that the recent 100% increase in transport costs, if it persists, could impact the annual inflation of import prices in OECD countries by almost 5 percentage points, adding 0. 4 percentage point to consumer price inflation after about a year.
Inflation in the G20 economies is expected to continue to slow from 6.6% in 2024 to 3.8% in 2025, while core inflation would reduce to 2.5% in 2024 and to 2.1% in 2024. % in 2025.
The OECD therefore estimates that price increases should return to their target level in most G20 countries by the end of 2025.
It considers, however, that it is too early to say whether underlying price pressure will be completely contained, as growth in unit labor costs generally remains above rates consistent with inflation targets at middle term.
The OECD also lowered growth forecasts for the euro zone to 0.6% in 2024 (compared to 0.9%), estimating that it should remain weak in the first half of the year before recovering as that real incomes strengthen. For 2025, it is targeting an increase of 1.3% (compared to 1.5%).
She also revised downward growth expectations in 2024 for the bloc’s two leading economies, to 0.3% (compared to 0.6%) for Germany, and to 0.6% (compared to 0.8%). for France.
(Written by Kate Entringer, edited by Blandine Hénault)
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