The global economy proved resilient in 2023, but there are signs that growth is easing as restrictive monetary policy takes effect. Global growth is projected to remain moderate in 2024 and 2025, with inflation declining towards target in most countries by 2025. Key near term risks include high geopolitical tensions, particularly if the conflict in the Middle East were to disrupt energy markets, and uncertainty about the strength of the ongoing impact from higher interest rates.

The Interim Report says that monetary policy should remain prudent to ensure that inflation returns durably to target, though policy interest rates can be lowered as inflation declines. Governments need to focus on ensuring fiscal sustainability, including through measures to reduce future spending pressures. Structural policy reforms are needed to strengthen the foundations for sustainable growth, with key priorities being to accelerate decarbonisation, revive global trade and improve educational outcomes.

The Interim Report is an update on the assessment in the OECD Economic Outlook, Volume 2023 Issue 2 (Number 114).