Take Two: OECD lifts global growth forecast; US Q2 GDP revised up

What do you need to know?

The Organisation for Economic Co-operation and Development (OECD) raised its 2025 global economic growth forecast to 3.2%, up from the 2.9% predicted in June. Though down on 2024’s total of 3.3%, the upgrade was attributed to growth being more resilient than anticipated in the first half of 2025, particularly in many emerging markets. It maintained its 2026 growth forecast of 2.9%. The OECD warned the full impact of tariffs could be yet to come, while inflation could also weigh on growth – though it highlighted that easing trade restrictions and faster technological advances could help boost expansion.

Around the world

The US economy grew at an annual rate of 3.8% during the second quarter (Q2), higher than the 3.3% previously estimated. The upward revision reflected stronger consumer spending and compared to a 0.6% contraction in Q1. Separately, US business activity expanded in September, albeit at a slower pace, the flash Purchasing Managers’ Index (PMI) showed. The composite, which includes services and manufacturing, edged down to 53.6 from August’s 54.6 - a reading above 50 indicates expansion. Elsewhere, the Eurozone composite PMI rose to 51.2, a 16-month high, from 51.0, while in Japan, it eased to 51.1 from 52.0, due to a reduction in manufacturing production.

Figure in focus: $386bn

Renewable energy investment rose 10% to a record $386bn in the first half of 2025 compared to the same period in 2024, according to research group Zero Carbon Analytics (ZCA), citing Bloomberg data. It noted overall global energy investment is set to reach about $3.3trn in 2025, with around $2.2trn going into green energy - including renewables – about twice that of fossil fuels. Despite the progress, ZCA asserted that finance and resilience gaps “demand concerted action” at November’s United Nations Climate Change Conference COP30, including laying out a multi-decade pathway off fossil fuels and clarifying the delivery of $300bn per year for climate action in developing countries.

Words of wisdom:

The High-Level Panel on Public Interest Media: A group of 11 leading economists have come together to urge world leaders to “recognize and uphold the economic value of public interest media in the age of artificial intelligence”. The High-Level Panel on Public Interest Media called on governments to invest in supporting and safeguarding independent media, against a backdrop of economic uncertainty and political disruption. Potential measures could include implementing a digital services tax, as well as new policies to better regulate the market, improve access to reliable information, and help people to distinguish fake news from real news.

What’s coming up?

Several Eurozone indicators are issued on Monday, including the bloc’s latest Economic and Industrial Sentiment indices. On Tuesday, the Reserve Bank of Australia convenes to decide on monetary policy; at its last meeting it lowered its cash rate by 25 basis points to 3.60%. The Eurozone publishes a flash estimate of September inflation on Wednesday and follows up with unemployment data on Thursday. Final PMIs covering Japan, Australia, the Eurozone, UK, Canada and the US are published Friday – when the US also updates markets with its latest employment numbers.