Take Two: OECD lifts 2024 growth forecast; China announces major economic stimulus
- 30 September 2024 (3 min read)
What do you need to know?
Global GDP growth is projected to stabilise at 3.2% in both 2024 and 2025, compared to 3.1% in 2023, according to a new report from the Organisation for Economic Co-operation and Development (OECD). The OECD had previously forecast 3.1% growth for 2024 and 3.2% in 2025. It said the global economy “is turning the corner” with declining inflation and robust trade growth but geopolitical tensions could weigh on global activity. AXA IM forecasts 3.2% growth in 2024 and 3.1% in 2025. Separately, US second quarter (Q2) GDP growth was confirmed at 3% annualised, compared to Q1’s upwardly revised 1.6% growth; 2023 was revised up by 0.4 percentage points (ppt) and 2022 by 0.6ppt.
Around the world
China introduced a raft of stimulus measures, its largest since the pandemic, in a bid to prop up the country’s troubled economy. Among other policy actions, the People's Bank of China (PBoC) announced a 50-basis-point (bp) cut to the reserve requirement ratio, the amount of capital banks need to hold against deposits, releasing RMB1trn ($142bn) for new lending. It also said it would reduce short and medium-term borrowing and existing mortgage rates. Subsequently the country’s leaders pledged enhanced fiscal support; during the Politburo meeting, officials addressed critical challenges to China’s economy, including the ongoing property market downturn. Global stocks rallied following the stimulus announcement.
Figure in focus: 4.28 million
The number of industrial robots automating production globally has reached an all-time high of 4.28 million units, an increase of 10% on the previous year, according to the International Federation of Robotics (IFR). The IFR’s World Robotics 2024 report said the number of annual installations - more than half a million units in 2023 - was the second highest ever, only 2% lower than the record set in 2022. Some 70% of newly deployed robots were installed in Asia last year – led by China - with 17% in Europe and 10% in the Americas.
Words of wisdom:
Pact for the Future: A landmark declaration where world leaders pledged to take action towards a safer, more peaceful, sustainable and inclusive world. The pact was adopted at September’s United Nations (UN) General Assembly, and focuses on areas including sustainable development, international peace and security, science and technology, youth and future generations and transforming global governance. It also includes the Global Digital Compact, the first worldwide agreement on regulating artificial intelligence. Together, they will “open pathways to new possibilities and opportunities,” UN Secretary General António Guterres said.
What’s coming up?
On Monday, the UK reports its final estimate of Q2 GDP growth while China publishes its latest Purchasing Managers’ Index (PMI). The Eurozone publishes its flash September inflation rate on Tuesday and August unemployment data on Wednesday, while final composite PMIs for Japan, the Eurozone, UK and the US follow on Thursday. On Friday the US announces its latest employment numbers.
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