The Organisation for Economic Co-operation and Development (OECD) has lowered its global growth forecast for 2025 and 2026, warning that U.S. President Donald Trump’s aggressive tariff policies risk stalling economic progress worldwide—especially in the United States.
Global GDP is now projected to grow by a modest 2.9% in both 2025 and 2026, down from the OECD’s previous estimates of 3.1% and 3.0%, respectively. The Paris-based organization attributed the downgrade to rising trade barriers, tighter financial conditions, reduced confidence, and growing policy uncertainty.
The OECD specifically cited the U.S. as a major risk to global stability, forecasting that its economy will grow by only 1.6% in 2025—down from 2.2%—and further slow to 1.5% in 2026. The sharp increase in effective tariff rates, from 2% in 2024 to 15.4% in 2025—the highest since 1938—along with reduced immigration and cuts to the federal workforce, are expected to hinder economic performance and job creation.
U.S. inflation is also projected to accelerate to nearly 4% by year’s end, far above the Federal Reserve’s target of 2%, even as inflation moderates in most other G20 economies.
While growth projections for the eurozone remain unchanged at 1%, the OECD slightly trimmed China’s forecast from 4.8% to 4.7% and Japan’s from 1.1% to 0.7%. The organization warned that escalating protectionism and trade tensions could further reduce global growth and fuel inflation.
OECD Chief Economist Alvaro Pereira urged countries to avoid deepening trade fragmentation and to pursue negotiated solutions, stating, “The best option for everyone, including the United States, is to sit down and reach an agreement.”
