OECD Cuts Global Growth Forecast as Trade Tensions Rise

Mace | 3rd June 2025 | Diplomacy, International, Trade Associations

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The OECD has lowered its global GDP forecast to 2.9% for both 2025 and 2026, citing U.S. tariffs and weakening investment. Growth estimates for the U.S., UK, and China were revised downward, while inflation remains high. India remains strong, but global trade and fiscal flexibility remain under pressure.

Global economic growth is projected to slow to 2.9 per cent in both 2025 and 2026, according to the Organisation for Economic Co-operation and Development. The OECD released its latest forecast this week, citing rising trade tensions and weakening investment as key factors behind the downgrade. The new figures mark a drop from previous estimates of 3.1 per cent growth in 2025. The OECD identified new tariffs introduced by the United States, especially on steel, aluminium and electric vehicles, as a significant drag on trade. Slowing demand in major economies is compounding the effect of tighter monetary policy. The report noted that global trade volumes remain subdued, with firms delaying investment decisions amid ongoing uncertainty. The United States is expected to grow by 1.8 per cent in 2025, down from earlier projections. The OECD cited high interest rates and reduced export competitiveness as contributing factors. The eurozone is forecast to expand by 1.4 per cent. The European C...

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