OECD Boosts G20 Inflation Forecast Amid Rising Energy Prices

The Organisation for Economic Co-operation and Development (OECD) has revised its inflation forecast for G20 economies, citing higher energy prices due to the Middle East conflict.

The OECD now predicts a 4.1% inflation rate this year, up from its previous projection of 4.0%. For next year, the organisation forecasts an even higher inflation rate of 3.6%, a 0.5 point increase from its previous estimate.

The impact of these revised forecasts is evident across various regions and countries. In the US, inflation is expected to rise to 2.6% next year, while in the eurozone it will reach 2.9%. Japan's inflation forecast has also been increased, with a predicted rate of 2.6%.

The OECD attributes these revised forecasts to rising commodity prices, which are likely to put pressure on economic growth. However, the organisation remains optimistic, citing robust AI-related investments and expected decreases in energy prices next year as factors that will likely support global economic growth.