THE OECD slashed its annual global growth forecast on Tuesday, warning that US President Donald Trump’s tariffs blitz would stifle the world economy — hitting the United States especially hard.
After 3.3-per-cent growth last year, the world economy is now expected to expand by a “modest” 2.9 per cent in 2025 and 2026, the Paris-based Organisation for Economic Co-operation and Development said.
In its previous report in March, the OECD had forecast growth of 3.1 per cent for 2025 and 3.0 per cent for 2026.
Since then, Trump has launched a wave of tariffs that has rattled financial markets.
“The global outlook is becoming increasingly challenging,” said the OECD, an economic policy group of 38 mostly wealthy countries.
It said “substantial increases” in trade barriers, tighter financial conditions, weaker business and consumer confidence, and heightened policy uncertainty will all have “marked adverse effects on growth” if they persist.
The OECD downgraded its 2025 growth forecast for the United States from 2.2 per cent to 1.6 per cent.
The world’s biggest economy is expected to slow further next year to 1.5 per cent.
Trump, who has insisted that the tariffs would spark a manufacturing revival and restore a US economic “Golden Age”, posted on his Truth Social platform before the OECD report’s publication: “Because of Tariffs, our Economy is BOOMING!”
The OECD holds a ministerial meeting in Paris on Tuesday and Wednesday.
AFP
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