OECD Lowers Global Economic Growth Forecast Amid Rising Uncertainties
The Organization for Economic Cooperation and Development has adjusted its projections for global economic growth in 2025 and 2026, citing increasing uncertainties and shifting trade policies.
The Organization for Economic Cooperation and Development (OECD) has released a report indicating a downward revision of global economic growth forecasts for 2025 from 3.1% to 2.9%, and for 2026 from 3.0% to 2.9%.
This adjustment is primarily attributed to rising global uncertainties and changes to trade policy under President Donald Trump of the United States.
In its statement, the OECD highlighted that 'global outlooks are becoming increasingly challenging,' pointing to significant increases in trade barriers, stricter financial conditions, weakened business and consumer confidence, and heightened political uncertainty as major risks to growth prospects.
These trends, if they continue, could significantly diminish economic forecasts.
The report warns that increasing trade costs, particularly in countries implementing new tariffs, are likely to spur inflation, although this may be partially offset by lower prices of goods.
The projected economic growth for the United States is expected to slow significantly from 2.8% in 2024 to just 1.6% in 2025 and 1.5% in 2026. Neighboring economies Mexico and Canada, due to their close trade ties with the U.S., are also anticipated to be adversely affected.
Experts predict that China's economic growth will also slow from 5.0% in 2024 to 4.7% in 2025 and 4.3% in 2026. Meanwhile, Russia is expected to see a steep decline in growth from 4.3% last year to only 1.0% in 2025 and 0.7% in 2026.
Germany, the largest economy in the Eurozone, is forecast to experience modest economic growth of 0.4% this year, with an acceleration to 1.2% by 2026. Similarly, France’s growth is projected at 0.6% in 2025 and 0.9% in 2026.
Average inflation across OECD countries is forecast to rise to 4.2% in 2025 and 3.2% in 2026, a notable increase compared to previous estimates.
This adjustment is primarily attributed to rising global uncertainties and changes to trade policy under President Donald Trump of the United States.
In its statement, the OECD highlighted that 'global outlooks are becoming increasingly challenging,' pointing to significant increases in trade barriers, stricter financial conditions, weakened business and consumer confidence, and heightened political uncertainty as major risks to growth prospects.
These trends, if they continue, could significantly diminish economic forecasts.
The report warns that increasing trade costs, particularly in countries implementing new tariffs, are likely to spur inflation, although this may be partially offset by lower prices of goods.
The projected economic growth for the United States is expected to slow significantly from 2.8% in 2024 to just 1.6% in 2025 and 1.5% in 2026. Neighboring economies Mexico and Canada, due to their close trade ties with the U.S., are also anticipated to be adversely affected.
Experts predict that China's economic growth will also slow from 5.0% in 2024 to 4.7% in 2025 and 4.3% in 2026. Meanwhile, Russia is expected to see a steep decline in growth from 4.3% last year to only 1.0% in 2025 and 0.7% in 2026.
Germany, the largest economy in the Eurozone, is forecast to experience modest economic growth of 0.4% this year, with an acceleration to 1.2% by 2026. Similarly, France’s growth is projected at 0.6% in 2025 and 0.9% in 2026.
Average inflation across OECD countries is forecast to rise to 4.2% in 2025 and 3.2% in 2026, a notable increase compared to previous estimates.
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