Link Securities | According to a new report published by the OECD, its analysts expect global gross domestic product (GDP) growth to slow this year, with projected growth of 2.9% in both 2025 and 2026, down from 3.3% last year. These analysts justified this weaker outlook to rising global uncertainty, driven mainly by changes in US trade policies.
In its report, the OECD warns that more trade barriers could further hurt growth, reduce incomes and slow down job creation. These analysts now expect the US economy to grow by just 1.6% this year, down from 3.3% in 2024, due to tariffs, reduced immigration and fewer government jobs. Mexico and Canada are also expected to experience slower growth due to their close trade ties with the US.
In turn, the OECD expects growth in the Eurozone economy to rise from 0.8% in 2024 to 1.0% and 1.2% in 2025 and 2026, respectively. China’s GDP growth is projected to moderate from 5.0 per cent in 2024 to 4.7 per cent in 2025 and 4.3 per cent in 2026.
In addition, the OECD noted that rising trade costs, especially in countries that raise tariffs, will also boost inflation, although its impact will be partially offset by falling commodity prices. In this regard, the OECD warns that while inflation is declining in many areas, prices of services remain persistently high, and increases in public spending, especially on defence, must be carefully managed.
