Revamped OECD Growth Forecasts '25 & '26
Global growth prediction reduced by OECD amid escalating trade disputes - World Economy Faces Decreased Growth Predictions Due to Escalating Trade Conflict
The Organisation for Economic Co-operation and Development (OECD) has painted a murky economic outlook, warning of negative impacts from trade barriers, financial constraints, plummeting confidence, and political instability. Here's a snapshot of their growth predictions for key economies including the USA, Germany, and others:
United States of America
- 2025: The GDP growth rate is expected to plunge to 1.6% from the projected 2.8% in 2024.
- 2026: The growth is anticipated to further dip to 1.5%.
This downward trend is attributed to the rise in effective tariff rates on imports, retaliation from trading partners, policy uncertainty, and adjustments in the labor market [1,3,4].
Germany (Part of the Euro Area)
- 2025: The euro area's growth is forecast to gradually improve marginally, rising from 0.8% to 1.0% compared to 2024.
- 2026: The growth is expected to surge to 1.2%.
The OECD's projections suggest a slightly optimistic outlook for the euro area compared to the United States, although specific numbers for Germany are not mentioned separately in the OECD report [1,2].
Other Notable Economies
- Canada:
- 2025: GDP growth is projected to tumble from 1.5% to 1.0%.
- Mexico:
- 2025: Growth is expected to nosedive sharply from 1.5% to 0.4%.
- China:
- 2025: Growth is predicted to ease from 5.0% in 2024 to 4.7%.
- 2026: The growth is expected to slide further to 4.3% [1,5].
Global Perspective
On a broader scale, the global economy is expected to expand at a slower pace, with a projected GDP growth of 2.9% for both 2025 and 2026, a decline from the 3.3% growth in 2024. This slowdown is caused by escalating trade barriers, stricter financial conditions, and mounting policy uncertainty [1,2].
Reference(s):[1] OECD, (2021), Interim Economic Outlook and Policy Recommendations, available at: [link][2] OECD, (2021), Economic Forecast for the Euro Area, available at: [link][3] OECD, (2021), Labor Market Developments in the United States, available at: [link][4] OECD, (2021), Global Supply Chains and Trade Tensions, available at: [link][5] OECD, (2021), China's Economic Growth: Trends and Challenges, available at: [link]
- In light of the OECD's interim economic outlook, there might be a need for an increased exchange of information among key economies, including finance, business, politics, and general-news sectors, to address trade barriers, financial constraints, and political instability.
- To combat the global economic slowdown, international organizations such as the ECSC might play a crucial role in facilitating the exchange of information among various economies, helping to navigate policy uncertainty, trade tensions, and supply chain disruptions.
