The Organization for Economic Cooperation and Development (OECD) has lowered its forecast for global economic growth for 2025 to 2.9% due to uncertainty related to trade tariffs introduced in a number of countries. This is stated in the organization's interim economic forecast.
„Over the past few months, we have seen a significant increase in trade barriers, as well as uncertainty in the field of economic and trade policies. In this difficult and uncertain environment, we have lowered our growth forecasts.“ We now predict that global growth will slow from 3.3% in 2024 to a modest 2.9% in 2025 and 2026. “The weakening economic outlook will be felt in almost all countries around the world without exception“, the forecast says.
At the same time, in March 2025, the organization has already revised down its expectations for global economic growth to 3.1%. In September 2024, OECD experts expected this figure to be 3.2% in 2025.
Economists warn that despite the overall decline in inflation, it remains high in a number of countries, especially food prices. In countries that will be affected by increased trade barriers, this figure may start to grow again, given the risk of introducing additional tariffs, which will further slow global growth. The decline in growth rates and the reduction in trade volume will negatively affect household incomes and slow down employment growth. In 2026 However, experts expect inflation in most countries to return to the targets of their central banks.
They also draw attention to the fiscal risks associated with high public debt “in many advanced economies“. Thus, over the next two years, this indicator will grow by an average of 2.3% of GDP in these countries - by 1.5% in the eurozone and by 5.9% in the United States. Spending will increase for defense, the “green transition” in the economy, social payments to pensioners and debt service. “High levels of indebtedness and tightening financial conditions pose particular risks for developing countries, many of which will need significant debt refinancing in the near future”, the document says.
In this regard, the OECD recommends avoiding “further trade fragmentation“ and the introduction of trade barriers, calling for agreements to reduce tariffs, which they say will help slow price growth. At the same time, if trade tensions do not escalate, then “inflation expectations will remain stable“. “Restoring fiscal discipline is key for countries to avoid fiscal sustainability problems and build buffers against future shocks“, the economists wrote, calling for the development of clear and credible medium-term budgetary plans.
According to the organization, eurozone GDP growth will remain at 1% in 2025 and accelerate to 1.2% in 2026. However, this will only happen if exports increase and governments take steps to reduce the level of budget deficits. The OECD also notes that European countries are changing fiscal rules to increase military spending, which could lead to deviations from medium-term budgetary plans of up to 1.5% of GDP in these countries over the next four years. As of April 2025 Sixteen EU countries have already asked the European Commission for permission to deviate from their budget plans, and the organization predicts "difficult choices" for some governments, including those related to cutting public spending and raising taxes.
The US economy is expected to grow by 1.6% in 2025 and 1.5% in 2026, which is in sharp contrast to 2.8% in 2024. "This reflects a significant increase in effective import tariffs and retaliatory measures by some trading partners, high uncertainty about economic policy, a significant slowdown in net immigration and a significant reduction in the number of federal employees," the statement said. experts say, calling on Washington to be more predictable and understandable policy.
The growth rate of the Chinese economy is expected to be 4.7% of GDP in 2025, falling to 4.3% in 2026. The OECD expects exports to decline amid new trade tariffs from the United States, but consumer price growth will remain moderate. Retaliatory tariffs on American goods will also affect imports, but not as significantly, given the increasing localization of production.