Boosting global investment is an imperative to revive ailing economies, according to a new report from the Organization for Economic Co-operation and Development (OECD). The OECD has significantly lowered its global economic growth projections, now anticipating a decline from 3.3% in 2024 to 2.9% in both 2025 and 2026, highlighting the urgent need for economic stimulus.
The OECD’s latest outlook report emphasizes that “weakened economic prospects will be felt around the world, with almost no exception,” leading to “lower growth and less trade [that] will hit incomes and slow job growth.” The report identifies “sluggish investment” as a key factor in this decline, noting its detrimental impact on growth, productivity, and living standards. The United States, Canada, Mexico, and China are singled out as major contributors to this global economic contraction.
Adding to the concerns, the OECD warns that “protectionism” will lead to increased inflation, causing costs for goods and services to rise. This inflationary pressure, combined with high debt levels, poses a significant risk for developing nations, making increased investment even more critical but potentially harder to finance.
In response to this grim outlook, the OECD advises central banks to “remain vigilant” regarding inflation, even if immediate interest rate hikes are not expected. Crucially, it concludes that “boosting investment will be instrumental to revive our economies and improve public finances,” urging governments to overcome existing hurdles and collaborate to foster vital capital flows.