The Organisation for Economic Co-operation and Development (OECD) has downgraded its global economic growth projections due to rising trade tensions and persistent inflation. The revised forecast predicts global GDP growth to slow to 2.9% in 2025 and 2026, contrasting sharply with earlier estimates.
In the United States, the economic outlook is even bleaker, with expected growth rates declining to 1.6% in 2025 and 1.5% in 2026, down from 2.8% in 2024. This downturn is primarily linked to ongoing trade disputes initiated under President Donald Trump, which have resulted in increased tariffs and market unpredictability. The U.S. is also projected to see inflation climb to nearly 4% by 2025, complicating the economic situation further.
Other significant economies, including major Eurozone nations and Japan, are also facing reduced growth forecasts, underscoring the widespread ramifications of global trade tensions. However, China’s growth forecast has seen a slight uptick, indicating a more resilient performance despite the imposition of additional tariffs.
The OECD highlights the urgent need for international collaboration to address the negative effects of rising trade barriers, warning that continued protectionist measures may lead to diminished living standards, elevated inflation, and increased global interest rates. It advocates for coordinated fiscal and monetary policies among member countries to enhance economic resilience and promote stability.
The report serves as a critical reminder of the interconnected nature of global economies, emphasizing the profound influence of trade policies on growth trajectories. It calls upon policymakers to adopt strategies that foster stability and sustainable growth amid ongoing trade disputes and inflationary pressures.
Leave a comment