KEY TAKEAWAYS
- The Organisation for Economic Co-operation and Development has cut its outlook for the U.S. and the global economy this year and next, citing “higher trade barriers” that are putting pressure on growth.
- The OECD said that the U.S.’s annual real GDP growth rate is expected to “slow from its very strong recent pace” to 2.2% this year and 1.6% in 2026.
- The Paris-based organization also cut its forecasts for 2025 global GDP growth to 3.1% from 3.3% and 2026 to 3.0% from 3.3%.
The Organisation for Economic Co-operation and Development (OECD) has cut its outlook for the U.S. and the global economy this year and next, citing “higher trade barriers” that are putting pressure on growth.
The OECD said the U.S.’s annual real gross domestic product (GDP) growth rate is expected to “slow from its very strong recent pace” to 2.2% this year and 1.6% in 2026.
The Paris-based organization also cut its forecasts for 2025 global GDP growth to 3.1% from 3.3% and 2026 to 3.0% from 3.3%. Last year, global GDP grew 3.2%.
The OECD said that real GDP growth in the euro area is expected to be 1.0% this year and 1.2% in 2026 “as heightened uncertainty keeps growth subdued.” The organization projects growth in China to slow to 4.4% next year from 4.8% in 2025.
‘Higher Trade Barriers,’ Uncertainty Seen Weighing
The OECD said that “higher trade barriers in several G20 economies and increased policy uncertainty (are) weighing on investment and household spending.”
U.S. President Donald Trump’s frequent tariff announcements have roiled markets and heightened U.S. consumer fears over higher prices. Canada and the European Union (EU) have also hit back with retaliatory countermeasures after the U.S.’s 25% tariffs on all steel and aluminum imports went into effect last week.