In its semiannual Outlook report published this Wednesday, the Organization for Economic Cooperation and Development (OECD) underlines the resilience of the global economy and emphasizes that the fall in inflation has allowed individual spending to increase and a rate cut, which have compensated for the uncertainties due to the global geopolitical situation.
The figures are quite contrasting even within developed countries, among which the behavior of the United States stands out, with “solid” growth, which 2.8% is expected this year and 2.4%.
The other side of the coin in the OECD is Japan, on the one hand, and on the other Europe, with a progression limited to 0.9% this year in the United Kingdom (1.7% in 2025) and in the euro zone, where the increase will be only 0.8% in 2024 and 1.3% in 2025.
The euro zone as a whole is weighed down by what are its three great enginesGermany (0% in 2024 and 0.7% in 2025), France (1.1% in 2024 and 0.9% in 2025) and Italy (0.5% in 2024 and 0.9% in 2025), whose evolution in turn contrasts greatly with that of Spain.
According to OECD forecasts, Spanish GDP will rise by 3% this year, and will be the second highest of all Member States, only behind that of Turkey (3.5%), which in many aspects has a very similar to that of an emerging power.
In fact, the differences are equally notable between the great emerging powers, with two giants pulling the cart, which are China (4.9% in 2024 and 4.7% in 2025) and India (6.8% and 6.9%, respectively), others that follow closely, such as Brazil (3.2% and 2.3%) and some that are much further behind such as Mexico (1.4% and 1.2%).
Although they do not name him explicitly, the authors of the report implicitly refer to the upcoming presidency of Donald Trump for his declared desire for a radical tightening of US trade policy with an increase in tariffs left and right: from China to its European allies through their partners and neighbors Mexico and Canada.
The OECD sees slight improvement in Latin America, insufficient to raise living standards
The OECD sees signs of a “slight improvement” in the economic growth of the main open economies of Latin America, but that in any case it will be “insufficient” to significantly raise the standard of living of their populations.
When presenting its semiannual Outlook report, The OECD published a chapter dedicated to Latin America in which it emphasizes that, with its potential growth so low, the region is not going to converge with the most advanced countries in GDP per capita.
Overall, in the seven countries analyzed in this chapter (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru) GDP will rise on average by 1.7%, the same as the so-called ‘club of the developed world’, which is the OECDand well below the global economy (3.2%).
OECD predicts economic recovery for Argentina
The figure will be somewhat higher in both 2025 (2.2%) and 2026 (2.1%) and the main reason will be that Argentina is finally going to emerge from the deep recession it has been going throughsince after the expected 3.8% decline in 2024, it will recover 3.6% next year and 3.8% the following year.
A positive element in the region is that inflation is moderating in most of these countries, which has allowed interest rates to fall, although in Brazil the rise in prices has led the central bank to raise them recently.
But at the same time, there are a series of risks, starting with the external ones derived from geopolitical and trade tensions, particularly given the possible increase in tariffs by the United States, with which Donald Trump has once threatened profusely. to return to power on January 20.
At the domestic level, the risks they face derive mainly from the high deficit in public accounts and the growing level of debt with its interest burden, which has worsened in almost all countries.
The OECD points out that most of them are currently behind fiscal goals that had been set for 2024, which is why it is considered “urgent” to take adjustment measures.
From a broader perspective, the great challenge for the region continues to be to increase long-term growth, which requires strengthening investment and accelerating productivity with improvements in the business environment and greater competition.
Regarding this last aspect, the authors of the report recall that Latin America, if compared with the OECD average, is lagging behind and must reduce regulatory barriers in key sectors such as network industries (electricity, transportation, telecommunications) and services in a way that attracts more investments.
Other priority reforms must be to reduce the administrative burden and entry costs for companies and for that one step is to simplify the incorporation of companies through the so-called single windows from which to carry out all the procedures online and in one go.
The OECD also emphasizes that the great renewable energy resources that Latin America offers and its favorable position to host local outsourcing activityparticularly from the United States, offer “unique opportunities.”
He also believes that investments in sustainable infrastructure and green industries could “turn the region into a sustainability leader”, but on condition of acting “now”.
Keep watching:
• Goldman Sachs predicts US economy will slow, but dodge recession as Fed raises rates
• Elon Musk says he has a “super bad feeling” about the economy, amid fears of a US recession.
• Economy contracted 1.5% in the first quarter, but consumers never stopped spending