OECD lowers global economic growth forecasts for 2025 and 2026

The Organization for Economic Cooperation and Development (OECD) on June 3 lowered its annual global growth forecast, warning that US President Donald Trump's wave of tariffs would hold back the world economy, with a particularly heavy impact on the world's leading economy.

Consumers choose goods at a supermarket in Rio de Janeiro, Brazil, March 7, 2025. (Photo: THX/TTXVN)

After recording 3.3% growth in 2024, the world economy is forecast to grow at a “modest” 2.9% in 2025 and 2026, the OECD said.

In a report released in March, the OECD forecast that the world economy could record growth of 3.1% in 2025 and 3% in 2026.

However, Mr Trump's subsequent wave of tariffs has roiled financial markets.

In the report, OECD chief economist Alvaro Pereira warned that the weakening economic outlook would be felt worldwide with almost no exceptions.

According to him, reduced growth and trade will affect incomes and slow job growth, and this outlook is particularly bleak for the US.

The OECD forecasts that US economic growth could reach only 1.6% in 2025, down from the 2.2% forecast in the previous forecast, and continue to decline to 1.5% in 2026.

In addition, the OECD also slightly reduced its growth forecast from 4.8% to 4.7% for China, while its growth forecast for Japan was also reduced from 1.1% to 0.7%. The OECD maintained its growth outlook for the Eurozone at 1%.

“The global outlook has become increasingly challenging,” the OECD report stressed, adding that a significant increase in trade barriers, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty could weigh on growth if prolonged.

OECD ministers are meeting in Paris on June 3-4, and EU and US trade negotiators are expected to hold talks on the sidelines after Trump threatened to impose a 50% tariff on EU imports.

Meanwhile, the Group of Seven (G7) is also holding a meeting focused on trade.

“For all countries, including the United States, the best option is for countries to sit down and reach an agreement,” OECD chief economist Alvaro Pereira said in a statement.

According to him, it is necessary to avoid further trade fragmentation in the coming months and years./.

According to VNA

Source: https://baothanhhoa.vn/oecd-ha-du-bao-tang-truong-kinh-te-toan-cau-nam-2025-va-2026-250902.htm