OECD upgrades global growth forecast to 3.2% as economies surprise to the upside
The Organisation for Economic Co-operation and Development (OECD) upgraded its global economic growth forecast on Tuesday, citing that many economies have been more resilient than projected so far this year.
The OECD has upgraded its global growth forecast for 2025 to 3.2%, compared to the 2.9% expansion it had forecast in June. Expectations for 2026 were unchanged at 2.9%. This would mark a slowdown from the 3.3% growth seen in 2024.
Growth expectations for the United States (US) were also raised to 1.8% for 2025, compared to June’s 1.6% projection. This still marks a significant fall from 2024′s 2.8% growth, however. The organization forecasts 1.5% growth for the US in 2026.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
