Global Growth Outlook Dims
The OECD’s latest economic outlook sees global GDP growth easing from 3.3% in 2024 to 3.2% in 2025 and further down to 2.9% in 2026. The revision reflects "front-loading ceasing and higher tariff rates and still-high policy uncertainty," which are damping investment and trade worldwide.
Tariffs and Trade Under the Spotlight
Industrial production and trade outperformed expectations in the first half of 2025, powered by companies front-loading orders ahead of looming tariff hikes. Yet, the report warns that the full impact of tariff increases—especially the U.S. effective tariff rate, which reached 19.5% at the end of August, its highest level since 1933—has yet to materialize.
Regional Shifts and Risks
In the United States, growth is set to slow from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026, as high-tech investment clashes with tariff headwinds and lower net immigration. The eurozone is forecast to expand by 1.2% in 2025 and 1.0% in 2026, supported by easier credit conditions but constrained by trade frictions and geopolitical uncertainty.
Looking Ahead
While the global upswing has shown resilience, the OECD cautions that risks remain elevated. Further tariff escalation, renewed inflationary pressures, fiscal stresses, and financial market volatility could all derail the recovery. To navigate these headwinds, the report underscores the need for structural reforms and strategic investment in emerging technologies like artificial intelligence to sustainably boost living standards.
Reference(s):
OECD's new global GDP growth forecast: 3.2% in 2025, 2.9% in 2026
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