According to the OECD’s spring economic report, the CPI in developed countries will remain above 3% both this year and in 2025.
Inflation in developed countries: it is expected that by 2025 it will still be above 3%
According to the OECD spring economic report, inflation in the group of member countries will close this year at 5.03% and will fall to 3.43% in the next. In the case of the G20, inflation will end this year at 5.9% and they expect it to decrease to 3.5% in 2025.
It should be noted that most central banks have the objective of 3% annually. In fact, this organization recommended wait until the second half of the year to begin cutting interest rates by the central banks of the main economies.
“A projected continued decline in headline and core inflation should allow central banks to begin reducing policy rates this year in many economies, although real rates will remain restrictive (above estimated neutral levels) for some time,” stated an OECD document.
The OECD anticipates that US inflation will continue to decline until reaching 2.45% in 2024 and 2.05% in 2025For his part, heto the United States Federal Reserve, He decided maintain rates at a level between 5.25% and 5.50%precisely to moderate the rise in prices.
OECD: growth prospects
From the OECD they point out that United States GDP grows 2.6% in 2024 and 1.8% in 2025. They also expressed that growth prospects could surprise to the downside if core inflation remains high, “which would delay any possible easing of monetary policy.”
Furthermore, they reported high level of deficit that the country will have in the coming years, making a profound fiscal reform necessary. In the case of the Eurozone, OECD forecasts anticipate a fall in inflation from 5.4% in 2023 to 2.34% in 2024 and will close 2025 with a CPI of 2.16 percent.
In this sense, they highlight that core inflation “remains unstable” and service prices increase by 4% annually, adding to underlying pressures.
“However, market-based inflation expectations have softened across all horizons and have stabilized at the 2% target from 2025,” they highlighted.
Source: Ambito
