Global gross domestic product (GDP) growth is set to slow less than originally expected this year, the OECD has said, though the full impact of the United States’ tariff policies has not yet arrived.
The organisation revised its projected global GDP growth for 2025 upwards from 2.9% to 3.2% in its interim Economic Outlook report, with 2026 projections remaining at 2.9%.
“Global growth proved more resilient than expected in the first half of 2025, especially in many emerging markets but also the United States. Industrial production and trade were buoyed by front-loading ahead of higher tariffs,” wrote the OECD.
“While the full impact of tariff increases is still unfolding, early signs of effects are visible in consumer behaviour, labour markets and prices. Labour markets are softening, with higher unemployment and fewer job openings in some economies, while disinflation has stalled in many economies as food prices rose and services inflation remained persistent.”
U.S. growth is projected to drop to 1.8% this year and 1.5% in 2026, compared with 2.8% in 2024. This is due to its tariff policies, as well as falling immigration and cuts to the federal government’s workforce.
GDP growth in China and the Eurozone is also set to decline in 2025 while Australia’s growth will rise from 1.1% in 2024 to 1.8% this year. Argentina and Germany are expected to sustain losses to their GDP.
Headline inflation is also likely to fall from 3.4% in 2025 to 2.9% in 2026, per the report. Core inflation in G20 nations will drop from 2.6% to 2.5%.
Argentina and Turkey will see the highest headline inflation this year, the OECD projects, at 219.9% and 58.5% respectively.
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