The global economic landscape is shifting, with growth projections weakening due to increasing trade barriers, tighter financial conditions, and rising uncertainty regarding policy decisions. The OECD’s latest Economic Outlook indicates a decrease in global growth from 3.3% in 2024 to 2.9% in both 2025 and 2026. The United States, Canada, Mexico, and China are expected to experience the most substantial slowdowns, while other economies may also see minor declines.
Specifically, GDP growth in the United States is predicted to fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026. In contrast, the euro area is expected to see a slight improvement in growth rates, climbing modestly from 0.8% in 2024 to 1.2% by 2026. Meanwhile, China’s growth is anticipated to moderate over the same period, decreasing from 5.0% to 4.3%.
Inflation remains a concern, particularly in nations that are increasing tariffs, which may further elevate trade costs. In the G20 economies, headline inflation is projected to decrease from 6.2% to 3.2% between 2025 and 2026. OECD Secretary-General Mathias Cormann emphasized the shift from stable growth and declining inflation to a more uncertain trajectory, calling for collaborative dialogue among governments to preserve the benefits of global trade.
Risks outlined in the Outlook include potential trade fragmentation and persistent inflationary pressures in certain economies. Governments are urged to maintain fiscal discipline while managing higher debt obligations, particularly as financial conditions tighten globally. To foster recovery, the OECD highlights the critical need for structural reforms aimed at enhancing business investment, innovation, and productivity.
As OECD Chief Economist Álvaro Santos Pereira notes, boosting investment, especially in the digital sector, is vital for creating a robust global economy for the future.