OECD Cuts Global Growth Forecast In Light Of Tariff Threat

The global economy is projected to grow slower than previously expected this year, as the trade war started by the Trump administration has shaken business and consumer confidence, created a lot of uncertainty and added to inflationary pressures as prices are all but certain to rise in the current high-tariff environment.

As Statista's Felix Richter reports, in its latest Economic Outlook, published on Tuesday, the OECD slashed its global growth forecast for 2025from 3.3 percent in December 2024 and 3.1 percent in March 2025 to just 2.9 percent, assuming that tariff rates effective as of mid-May will remain in place through 2026.

Unsurprisingly, the U.S. and its main trade partners China, Canada and Mexico are expected to be most affected by the tariffs,with U.S. GDP growth expected to slow sharply from 2.8 percent in 2024 to 1.6 percent this year and 1.5 percent in 2026.

This is down from December projections of 2.4 and 2.1 percent, highlighting the adverse effect that Trumps tariff policy is expected to have on the American economy.

The effect of the new trade barriers is expected to be most severe through 2025, as global growth is expected to slow to 2.6 percent by the fourth quarter of this year, before gradually climbing back to 3.0 percent by the end of 2026.

If trade barriers arent lowered, he warned, the growth impact would be “quite significant” with “massive repercussions for everyone.”