Interest Rate Projections for Advanced Economies

Key takeaways

• Most advanced economies are projected to lower their interest rates by 1.0–1.25 percentage points between mid-2024 and mid-2026

Japan emerges from the depths

After decades of near-zero and negative interest rates, Japan is entering a new monetary era. According to OECD projections, the Bank of Japan is expected to gradually raise its short-term policy rate to around 1.5% by the end of 2026.

This shift reflects growing confidence in Japan’s economic recovery, with inflation stabilizing near the 2% target and wage growth beginning to gain momentum.