The OECD has predicted global economic growth will dip below 3 percent next year as the stockpile of goods obtained in the lead-up to increased tariffs dwindle.
Secretary-General Mathias Cormann said while the global economy was more resilient than anticipated in the first half of 2025, downside risks loomed as higher barriers to trade and geopolitical and policy uncertainty continued to weigh on activity in many economies.
Secretary-General Cormann said the latest OECD Interim Economic Outlook projected global growth slowing from 3.3 percent in 2024 to 3.2 percent in 2025 and 2.9 percent in 2026, “as early stockpiles of goods accumulated in anticipation of higher tariffs are drawn down, and as the implementation of tariffs and continuing policy uncertainty weigh on investment and trade”.
He said GDP growth in the United States was projected to decline to 1.8 percent in 2025 and 1.5 percent in 2026.
“In the euro area, growth is expected to be 1.2 percent in 2025 and 1 percent in 2026, (while) China’s growth is projected to ease to 4.9 percent in 2025 and 4.4 percent in 2026.”
Secretary-General Cormann said inflation was projected to decline in most G20 economies as economic growth moderates and labour market pressures ease.
He said headline inflation was projected to decline from 3.4 percent in 2025 to 2.9 percent in 2026, with core inflation in G20 advanced economies remaining broadly stable at 2.6 percent in 2025 and 2.5 percent in 2026.
“The global economy has remained resilient, but the full effects of higher tariffs and policy uncertainty have yet to be felt.
“Global economic growth is projected to slow, and significant risks remain, as well as concerns about fiscal sustainability and financial stability.”
Secretary-General Cormann said to strengthen economic growth prospects, a key priority was to ensure a lasting resolution to trade tensions.
“We recommend that governments engage productively with one another to make international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and rules-based global trade.”
