OECD Raises Global Growth Forecast to 3.2% for 2025
The OECD now expects U.S. GDP growth to slow to 1.8% in 2025, down from 2.8% in 2024, and to decelerate further to 1.5% in 2026.
Quick overview
- The OECD has raised its global growth outlook for 2025 to 3.2%, reflecting unexpected resilience in the world economy despite trade tensions.
- U.S. GDP growth is projected to slow to 1.8% in 2025, attributed to the impact of restrictive trade policies.
- Emerging markets, particularly in Asia, are expected to drive growth, with China projected to grow 4.9% in 2025.
- The report warns of potential risks including cooling trends in major economies and persistent inflation pressures, especially in the U.S.
The Organization for Economic Cooperation and Development (OECD) raised its global growth outlook for 2025 to 3.2%, three-tenths higher than its June projection, according to its quarterly report released Tuesday.
Despite sharp tariff hikes imposed by U.S. President Donald Trump, the OECD noted the world economy has shown greater-than-expected resilience. However, it warned that the full impact of protectionist measures has yet to be felt, with potentially more contractionary effects in the months ahead.
U.S. and Europe: Signs of a Slowdown
The OECD now expects U.S. GDP growth to slow to 1.8% in 2025, down from 2.8% in 2024, and to decelerate further to 1.5% in 2026—which it interprets as a direct cost of restrictive trade policies.
In the eurozone, growth is forecast at 1.2% in 2025 and 1.0% in 2026. Spain, however, is expected to stand out, with expansions of 2.6% in 2025 and 2.0% in 2026, making it one of the bloc’s strongest performers.
Emerging Markets Drive Momentum
Outlooks are more favorable in emerging economies. In Asia, China is projected to grow 4.9% in 2025 and 4.4% in 2026, supported by stronger industrial activity and consumption. Brazil is expected to expand 2.3% in 2025, while Mexico should see modest improvement with growth of 0.8% in 2025 and 1.3% in 2026.
According to the OECD, part of the resilience reflects companies front-loading production and trade to get ahead of new tariffs, temporarily boosting activity despite higher costs.
Risks and Inflation Pressures
The report cautioned about cooling trends in South Korea, Germany, and Brazil, as well as weaker consumer demand in the U.S., eurozone, and China. Future risks include further tariff escalations, rising global debt burdens, and renewed pressure on interest rates.
On inflation, the OECD’s chief economist said price levels will remain elevated in 2025, particularly in the U.S., with food costs driving price pressures in economies such as Japan and South Africa.
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