The global economy is projected to grow by 3.2 percent in 2024 and 3.3 percent in both 2025 and 2026, according to the latest economic outlook released by the Organization for Economic Cooperation and Development (OECD) on Wednesday.

While global growth shows signs of resilience, the report highlights significant regional disparities and ongoing challenges.

Emerging Asia continues to be the biggest contributor to global growth while the US economy is forecast to expand 2.8 percent in 2025, before slowing to 2.4 percent in 2026.

In contrast, the euro area is expected to grow more modestly, with GDP increases of 1.3 percent in 2025 and 1.5 percent in 2026, supported by improving real household incomes, tight labor markets, and reductions in policy interest rates.

However, the organization also warned that higher uncertainty and continued increases in trade-restrictive measures could raise costs and prices, deter investment, weaken innovation, and ultimately lower growth.

As for inflation, the OECD said that headline inflation has returned to target levels in a rising number of advanced and emerging-market economies despite lingering pressures in service sectors.

In OECD member countries, inflation is projected to decline from 5.4 percent in 2024 to 3.8 percent in 2025, and further to 3.0 percent in 2026, aided by ongoing restrictive monetary policies.

As a result, central banks are expected to further lower monetary policy rates. "In most economies, real interest rates could decline to be around estimates of neutral levels in 2026," the report added.

"The global economy has proved resilient. Inflation has declined further towards central bank targets, while growth has remained stable," OECD Secretary-General Mathias Cormann said, before warning that significant challenges remain.

To tackle the challenges, the OECD has called on countries to durably reduce inflation, address rising fiscal pressures and tackle labor shortages to alleviate structural impediments to higher trend growth.