World Economy on Track for Slight Pickup as Inflation Is Tamed

Falling interest rates and recovering real wages will help drive a slight pickup in global economic growth this year and next, while recent falls in oil prices could aid the final push to tame inflation, the Organization for Economic Cooperation and Development said Wednesday.

However, the Paris-based research body warned that “comparatively benign” projections may not come to pass, with uncertainties remaining about how large an impact high interest rates will have on demand in the months ahead, while an escalation of the conflicts in the Middle East could push oil prices sharply higher.

In its quarterly report on the economic outlook, the OECD said it now expects global output to increase by 3.2% in 2024 and again in 2025, having grown by 3.1% last year. That was a slight upgrade from the 3.1% growth it forecast in May, and a sizable revision from the 2.7% expansion it expected to see when it published forecasts at the end of 2023.

The U.S. is largely responsible for that better performance, but India and Brazil are also growing more rapidly than expected, as is the U.K. By contrast, Germany and Japan have disappointed, with the former now forecast to hover on the brink of stagnation this year, and the latter to experience a small contraction.

However, despite the improved outlook for growth, and inflation rates that the OECD expects to fall to central-bank targets by the end of next year, consumer confidence has yet to pick up significantly, which would give a further boost to growth.

The OECD said that persistent dissatisfaction with economic performance, which is not limited to the U.S., is likely linked to the fact that food prices remain well above their pre-pandemic levels.

“There is a disconnect between how the economy is perceived and how the economy is doing,” said Alvaro Pereira , the OECD’s chief economist. “For people who go to the supermarket, food prices relative to wages are still higher.”

In the U.S., the gap between food-price and wage inflation between the end of 2019 and the second quarter of this year was roughly four percentage points. But that gap was much wider in large European economies, and above 15 percentage points in Germany. In South Africa, it was above 20 points.

The recent fall in oil prices may help offset some of that dissatisfaction, and boost a global fight to tame inflation that appears to be in its final stages. The OECD estimated that the 10% decline since July would knock half a percentage point off the global rate of inflation, if it were to be sustained. But it is far from certain that it will be.

“If the conflict in the Middle East escalates, this will have an impact on energy prices,” Pereira said.

Should escalation be avoided, the OECD said further falls in oil prices could allow for a faster reduction in central-bank interest rates than it currently expects, and boost growth in countries that don’t produce oil.

With inflation rates set to fall further, the OECD said central banks should lower their key interest rates, but in a manner that is “carefully judged” to ensure price rises continue to slow. It expects the Federal Reserve’s key rate to fall by a further 1.5 percentage points by the end of 2025, while the European Central Bank’s key rate is forecast to fall by 1.25 percentage points.

The Paris-based body said the interest-rate rises that central banks announced in 2022 and 2023 to counter a surge in inflation continue to weigh on growth, although with diminishing force.

But it noted that many households and businesses continue to see the interest rates they pay rise as their debts mature and they enter into new contracts. The OECD estimated that almost a third of rich-country corporate debt is due to mature in 2026, with new debt issued to replace it likely paying a higher rate of interest.

The OECD left its forecast for U.S. growth in 2024 unchanged at 2.6%, and also retained its 4.9% projection for China. Pereira said the package of stimulus measures announced by the Chinese government Tuesday could lead to a “slight” upward revision when the OECD next releases growth forecasts in early December.

To get what you want, try closing your mouth.

A well-deployed silence can radiate confidence and connection. The trouble is, so many of us are awful at it.

We struggle to sit in silence with others, and rush to fill the void during a pause in conversation. We want to prove we’re smart or get people to like us, solve the problem or just stop that deafening, awkward sound of nothing.

The noise of social media and constant opinions have us convinced we must be louder to be heard. But do we?

“I should just shut up,” Joan Moreno , an administrative assistant in Spring, Texas, often thinks while hearing herself talk.

Still, she barrels on, giving job candidates at the hospital where she works a full history of the building and parking logistics. She slips into a monologue during arguments with her husband, even when there’s nothing good left to say. She tries to determine, via a torrent of texts, if her son is giving her the silent treatment. (Turns out he just had a cold.)

“I should have just held it in,” she thinks afterward.

We often talk ourselves out of a win. Our need to have the last word can make the business deal implode or the friend retreat, pushing us further from people we love and things we want.

“Let your breath be the first word,” advises Jefferson Fisher , a Texas trial lawyer who shares communication tips on social media.

The beauty of silence, he says, is that it can never be misquoted. Instead, it can act as a wet blanket, tamping down the heat of a dispute. Or it can be a mirror, forcing the other person to reflect on what they just said.

In court, he’ll pause for 10 seconds to let a witness’s insistence that she’s never texted while driving hang in the air. Sure enough, he says, she’ll fill the void, giving roundabout explanations and excuses before finally admitting, yes, she was on her phone.

For a mediation session, he trained a client to respond in a subdued manner if the other party said something to rile him up. When an insult was lobbed, the client sat quietly, then slowly asked his adversary to repeat the comment. No emotional reaction, just implicit power.

“You’re the one who’s in control,” Fisher says.

Acing negotiations

To be the boss, “you gotta be quiet,” says Daniel Hamburger , who spent years as the chief executive of education and healthcare technology firms.

He once sat across the negotiating table from an executive who was convinced his company was worth far more than Hamburger wanted to pay to acquire it. What Hamburger desperately wanted to do was explain all the reasons behind his math. What he actually did was throw out a number and then shut his mouth.

Soon they were shaking on a deal.

Hamburger, who retired last year and now sits on three corporate boards, also deployed strategic silence when running meetings or leading teams. If the boss chimes in first, he says, some people won’t speak up with valuable insights.

Days into one CEO job, Hamburger was confronted with two options for rewriting a piece of the company’s software. He didn’t answer, and instead turned the question back on the tech team.

“People were like, ‘Really? Are you really asking?’” he says. By morning, he had a 50-page deck from the team outlining the plan they’d long thought was best. He left them to it, and the project was done in record time, he says.

A day without speaking

Staying mum can feel like going against biology. Humans are social animals, says Robert N. Kraft , a professor emeritus of cognitive psychology at Otterbein University, in Ohio.

“Our method of connecting—and we crave it—is talking,” he says, adding that it excites us, raising our blood pressure, adrenaline and cortisol.

For years, Kraft assigned his students a day without words. No talking, no texting. Some of the students’ friends reported later that they’d been unnerved. After all, silence can be a weapon.

Many students also found that when forced to listen, they bonded better with their peers.

When we spend conversations plotting what to say next, we’re focused on ourselves. Those on the receiving end often don’t want to hear our advice or semi related anecdotes anyway. They just want someone to listen as they work through things on their own.

The question mark trick

Without pauses, we’re generally worse speakers, swerving into tangents or stumbling over sounds.

Michael Chad Hoeppner , a former actor who now runs a communications training firm, recommends an exercise to get used to taking a beat. Ask one question out loud, then draw a big question mark in the air with your finger—silently.

“That question mark is there to help you live through that fraught moment of, ‘I really should keep talking,’” Hoeppner says.

At a cocktail party or in the boardroom, you can subtly trace a question mark by your side or in your pocket to force a pause.

Sell with silence

Fresh out of college, Kyler Spencer struggled through meetings with potential clients. Some sessions stretched to two hours and still didn’t end in a yes.

The financial adviser, based in Nashville, Ill., realized he was rambling for 15-minute stretches, spouting off random economic facts in an attempt to sound savvy and experienced.

“I basically just bulldozed the meeting,” says Spencer, now 27.

He started meditating and doing breathing exercises to calm his nerves before meetings. He now makes sure to stop talking after a minute or two. The other person will jump in, sharing about their life, fears and goals. It’s information Spencer can use to build trust and pitch the right products.

His client list soon started filling up, and happy customers now send referrals his way.

“It’s amazing,” he says, “what you learn when you’re not the one talking.”

World Economy on Track for Slight Pickup as Inflation Is Tamed

In its quarterly report on the economic outlook, the OECD said it now expects global output to increase by 3.2% in 2024 and again in 2025

Silence makes us feel awkward. Deploying it can be a superpower.

Acing negotiations

A day without speaking

The question mark trick

Sell with silence