OECD Advocates Increased Property Taxes to Address Debt Issues
ECONOMY & POLICY

OECD Advocates Increased Property Taxes to Address Debt Issues

The OECD slightly increased its global economic growth forecast for 2024 on Wednesday, while also advocating for higher property and environmental taxes to address the rising debt levels in numerous countries.

In its economic outlook report titled "Turning the Corner," the Paris-based organization projected that global gross domestic product (GDP) would grow by 3.2 per cent, up from the previous estimate of 3.1 per cent.

The Organisation for Economic Co-operation and Development noted in its biannual report that global output growth has shown resilience and inflation has continued to moderate.

Central banks in the United States and Europe have begun to lower interest rates as inflation, which surged following the Covid pandemic and Russia's invasion of Ukraine, is finally easing.

The OECD highlighted "relatively robust" growth in countries such as the United States, Brazil, Britain, India, and Indonesia, and it revised Russia's GDP growth forecast upward by 1.1 percentage points to 3.7 per cent. However, it slightly reduced the growth outlook for Germany, Europe's largest economy, to 0.1 per cent, and indicated that Japan's GDP would contract by 0.1 per cent. Argentina, on the other hand, is expected to experience a more significant contraction of four per cent.

While the OECD has raised its world GDP outlook, it expressed concerns about the increasing debt levels and urged governments to make "stronger efforts" to manage spending and increase revenue.

The report emphasized that decisive fiscal actions are necessary to ensure debt sustainability, maintain the ability of governments to respond to future shocks, and generate resources to address upcoming spending pressures.

It also noted that governments are facing considerable fiscal challenges due to higher debt and the additional spending demands stemming from aging populations, climate change mitigation and adaptation measures, plans to increase defense spending, and the need to fund new reforms. According to a United Nations report published in June, global public debt reached a record $97 trillion last year, having doubled since 2010.

The OECD slightly increased its global economic growth forecast for 2024 on Wednesday, while also advocating for higher property and environmental taxes to address the rising debt levels in numerous countries. In its economic outlook report titled Turning the Corner, the Paris-based organization projected that global gross domestic product (GDP) would grow by 3.2 per cent, up from the previous estimate of 3.1 per cent. The Organisation for Economic Co-operation and Development noted in its biannual report that global output growth has shown resilience and inflation has continued to moderate. Central banks in the United States and Europe have begun to lower interest rates as inflation, which surged following the Covid pandemic and Russia's invasion of Ukraine, is finally easing. The OECD highlighted relatively robust growth in countries such as the United States, Brazil, Britain, India, and Indonesia, and it revised Russia's GDP growth forecast upward by 1.1 percentage points to 3.7 per cent. However, it slightly reduced the growth outlook for Germany, Europe's largest economy, to 0.1 per cent, and indicated that Japan's GDP would contract by 0.1 per cent. Argentina, on the other hand, is expected to experience a more significant contraction of four per cent. While the OECD has raised its world GDP outlook, it expressed concerns about the increasing debt levels and urged governments to make stronger efforts to manage spending and increase revenue. The report emphasized that decisive fiscal actions are necessary to ensure debt sustainability, maintain the ability of governments to respond to future shocks, and generate resources to address upcoming spending pressures. It also noted that governments are facing considerable fiscal challenges due to higher debt and the additional spending demands stemming from aging populations, climate change mitigation and adaptation measures, plans to increase defense spending, and the need to fund new reforms. According to a United Nations report published in June, global public debt reached a record $97 trillion last year, having doubled since 2010.

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