The Organisation for Economic Cooperation and Development (OECD) has revised its global growth forecast, predicting a slowdown to 3.1% in 2025 and 3% in 2026. While the global economy has shown resilience in 2024, growth is expected to decelerate due to lingering inflation, an uncertain policy environment, and slowing growth in major economies.
The United States’ GDP is projected to grow by 2.2% in 2025 before slowing to 1.6% in 2026. In the euro area, growth will be modest, with projections of just 1% in 2025 and 1.2% in 2026. Similarly, China’s growth is expected to slow, from 4.8% in 2025 to 4.4% in 2026.
Inflation is also projected to remain higher than expected, despite moderation as growth softens. Goods price inflation is picking up in some countries, although from low levels. The OECD anticipates annual headline inflation in G20 economies to be 3.8% in 2025 and 3.2% in 2026.
The report highlights risks such as increasing trade restrictions, which may raise production and consumption costs. The OECD stresses the importance of maintaining a well-functioning, rules-based international trading system to foster global growth and avoid further economic fragmentation. Additionally, high public debt and elevated asset valuations remain concerns, with the need for decisive fiscal actions to ensure economic stability.
