OECD Projects Global Economy to Grow 3.3% in 2025-2026, Warns of Risks
The Organization for Economic Cooperation and Development (OECD) said in its latest Economic Outlook, published on Wednesday, that real global GDP growth is projected to reach 3.3% both in 2025 and 2026, up from 3.2% this year....
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Facts
- The Organization for Economic Cooperation and Development (OECD) said in its latest Economic Outlook, published on Wednesday, that real global GDP growth is projected to reach 3.3% both in 2025 and 2026, up from 3.2% this year.[1][2]
- According to the forecast, OECD economies will grow 1.9% in both years — below pre-pandemic averages — while G20 economies will see a growth of 3.3% in 2025 and 3.2% in 2026.[1][3]
- The quarterly report, which assumes no changes in trade policies, highlights significant challenges such as geopolitical tensions, growing government deficits, and an expected rise in tariffs, but also potential surprises on the upside.[1][4]
- Though the Paris-based organization doesn't name US Pres.-elect Donald Trump in its analysis — the first by a major international economics institution since his election win — the reference to 'greater trade protectionism, particularly from the largest economies' alludes to his campaign pledges on trade.[5][6]
- Regarding debt troubles, OECD chief economist Alvaro Pereira said that public finances continue to deteriorate in a number of countries, including France and the US.[4][6]
- The OECD also warned central banks against cutting interest rates too fast, as service-sector inflation persists at a median 4% across rich nations despite headline inflation back at target levels in October.[7][2]
Sources: [1]OECD, [2]China Daily, [3]Anadolu Agency, [4]Wall Street Journal, [5]France 24, [6]Bloomberg and [7]Financial Times.
Narratives
- Narrative A, as provided by Al jazeera and East Asia Forum. As Donald Trump prepares to take office for a second term at the White House, a forecast that assumes no changes in trade policies is set for failure. Rather than a steady growth in the coming years, the global economy is likely to take a hit from tariffs he has pledged to impose.
- Narrative B, as provided by Economist and Capital Economics. Whether you believe that the next Trump administration will harm the world economy or boost GDP growth in the US, the fact is that his trade plans will hardly be implemented in full — let alone cause a macro impact in the near term. If these projections don't stand, other reasons are likely to blame.
