OECD Projects Global GDP Growth to Slow to 3.1% in 2025 Amid Rising Trade Barriers, Geopolitical Uncertainty

The OECD projects global GDP growth to decline from 3.2% in 2024 to 3.1% in 2025 and 3% in 2026, Xinhua reported. This downward revision is attributed to “higher trade barriers” in G20 economies and increased geopolitical uncertainty affecting investment and household spending.

In the U.S., GDP growth is expected to drop to 2.2% in 2025 and 1.6% in 2026 due to tariff hikes. The euro area is forecast to see growth of 1% in 2025 and 1.2% in 2026, with Germany, France, and Italy experiencing growth below 1%. Spain’s economy is projected to grow by 2.6% in 2025.

Inflation is anticipated to remain elevated, with G20 headline inflation declining from 3.8% in 2025 to 3.2% in 2026. In the euro area, inflation is expected to fall to 2% by 2026, while U.S. inflation may rise to 2.8% in 2025. The OECD emphasizes the need for structural reforms to support economic growth amidst rising protectionism.