OECD Lifts US and Global Growth Forecasts
Resilience in the first half of 2025 prompts upgrade, but the Organisation for Economic Co-operation and Development warns of a slowdown ahead.
The Organisation for Economic Co-operation and Development (OECD) has raised its growth forecasts for both the U.S. and the global economy, citing unexpected resilience in the first half of 2025. The global economy is now projected to grow by 3.2% in 2025, an increase from the 2.9% forecasted in June, .
Despite the upgrade, the OECD warns that the global economy is still treading a fine line. Growth is expected to slow to 2.9% in 2026, with higher tariffs and policy uncertainty weighing on the outlook. For the United States, GDP growth is anticipated to decelerate from 2.8% in 2024 to 1.8% in 2025. This slowdown is attributed to higher tariff rates and a reduction in net immigration, though robust investment in advanced technology sectors like artificial intelligence is providing some offset.
Inflation across the globe is expected to ease to 3.4% in 2025 and 2.9% in 2026. However, the OECD expressed concern that the slowdown in inflation had come to a halt in some countries, with the potential for inflationary pressures to resurface. The report identifies several significant downside risks, including further increases in trade barriers, a resurgence of inflationary pressures, and increased concerns about fiscal risks. , which could further dampen global trade and investment.
The OECD recommends that countries engage cooperatively within the global trading system to make trade policy more transparent and predictable. It also advises central banks to remain vigilant but flexible with monetary policy. and enable governments to respond to future shocks.