As we enter the fourth quarter of the year, the global economy seems to be navigating through a more stable growth trajectory, showing some signs of recovery after a turbulent phaseYet, significant downward risks linger, given the myriad challenges that still existPolicymakers are urged to implement proactive measures to fortify the backbone of ongoing economic progress.

On September 25, the Organization for Economic Cooperation and Development (OECD) released its latest Economic Outlook reportThis document adjusted the global economic growth forecast for 2024 from an earlier estimate of 3.1% to 3.2%, while keeping the 2025 expectation stable at 3.2%. The report highlights a continued decrease in inflation rates and a resilient economyNotably, many countries within the G20 grouping are witnessing relatively strong economic growth.

This year has marked a gradual shift in the lackluster growth of the global economyIn the first half of the year, manufacturing sectors across different regions displayed a variety of recovery paces, influencing overall economic performance considerablySpecifically, emerging markets demonstrated robust growth during the second quarter, in stark contrast to the slower growth observed in developed economiesThe discrepancy was accentuated by differing economic environments and policy timelines across countries, leading to a pronounced divergence in global recovery patternsHowever, as September rolled in, monetary policy adjustments, epitomized by the U.SFederal Reserve's decision to cut interest rates, hinted at a smoother growth path for advanced economies like the U.S., Japan, and those in EuropeCoupled with diminishing external pressures and ongoing structural adjustments within their own economies, many emerging markets are poised to unlock further growth potential.

The amelioration of global trade and inflation also creates conducive conditions for restoring growthTrade recoveries have outpaced expectations, while inflation rates are steadily declining and stabilizing

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The OECD predicts that by the end of 2025, inflation rates in most G20 economies will align with central bank targetsAnalysts assert that such trends not only alleviate uncertainties surrounding the global economy but also grant governments increased leeway in their monetary policies.

New sources of growth are beginning to take shape on a global scaleThe progress in digital transformation and the shift toward a green economy are expected to inject fresh energy into global growthThe digital revolution is enhancing productivity while spawning innovative business models and servicesSimultaneously, the movement towards a green economy supports sustainable development while promoting environmental protection, thus expanding future growth horizonsThese burgeoning sectors may narrow the growth disparities among countries and contribute to a more stabilized growth pattern.

However, it's essential to recognize that persistent challenges remainDemand from developed markets in the U.S. and Europe shows no significant signs of improvementThe combination of high interest rates and elevated levels of debt remains a daunting backdrop for the economyConsumer spending in advanced nations continuously cools as the surplus savings accumulated during the pandemic gradually dwindleA drop in demand from these developed regions could adversely impact countries and areas that heavily depend on exports, consequently affecting the overall performance of global trade.

The outlook for high interest rates and debt levels shows little sign of relentingWhile global supply chains are recovering alongside production expansions, inflation remains persistently highMajor central banks in the U.S. and Europe have embarked on interest rate cuts, yet rates still hover at elevated levels and are expected to remain so for an extended period, keeping the global economy under a burden of high financing costs for the time beingFurthermore, both public and corporate debt levels are alarmingly high, posing threats to economic growth

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