OECD Increases Global GDP Growth Prediction, Recommends Higher Property Taxes
The Organisation for Economic Co-operation and Development (OECD) has revised its global economic growth forecast for 2024 slightly upward. The OECD recommends implementing higher property and environmental taxes to address the increasing debt levels in many countries.
According to the OECD’s latest economic outlook report titled “Turning the Corner,” global growth is expected to stabilize as the impact of central bank rate hikes diminishes and falling inflation boosts household incomes.
The OECD forecasts global economic growth to reach 3.2% in both 2024 and 2025, up from the previous forecast of 3.1% for 2024. The report notes that global output growth has remained resilient and inflation has continued to moderate.
Central banks in the US and Europe have started cutting interest rates to combat moderating inflation, which spiked after the COVID-19 pandemic and Russia’s invasion of Ukraine. As the effects of tightening monetary policy wane, rate cuts are expected to stimulate spending, while lower inflation will benefit consumer spending.
The OECD predicts that if the recent decline in oil prices persists, global headline inflation could be lower than expected. The report also projects that the US Federal Reserve and the European Central Bank will lower their main interest rates by the end of 2025.
The OECD highlighted relatively robust growth in countries like the US, Brazil, Britain, India, and Indonesia. It raised Russia’s GDP growth forecast while forecasting a slowdown in China and Japan’s economies. The Eurozone is expected to see improved growth in 2025.
Turkey’s GDP growth forecast was revised slightly downward for 2024 and 2025. The OECD recommends maintaining tight monetary policy in Turkey to ensure inflation continues to decrease towards targeted levels.
On the issue of rising debt, the OECD stresses the importance of governments taking decisive fiscal actions to ensure debt sustainability, create room for future government responses to shocks, and generate resources for future spending needs. The organization also calls for efforts to eliminate tax loopholes and enhance revenues from indirect, environmental, and property taxes.
In conclusion, the OECD warns that without sustained action to address rising debt levels, future debt burdens will continue to increase, limiting governments’ ability to respond to future economic shocks. Efforts to raise taxes on the wealthiest individuals and large corporations have become increasingly important in light of growing fiscal challenges worldwide.
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Sofia Martins graduated from the Technical University of Madrid with a degree in Agronomy, focusing on plant nutrition and soil science. She has a deep interest in sustainable fertilizer management and works to develop eco-friendly solutions that optimize plant growth while minimizing nutrient runoff. Sofia is a dedicated researcher and has published several articles on sustainable plant nutrition practices.