OECD Cuts Global Growth Forecast in Light of Tariff Threat

By Felix Richter – Statista

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.

In its latest Economic Outlook, published on Tuesday, the OECD slashed its global growth forecast for 2025 from 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 Trump’s tariff policy is expected to have on the American economy.