Global GDP growth to slow down to 2.9% in 2025, 2026: OECD

Global GDP growth is projected to slow from 3.3 percent in 2024 to 2.9 percent this year and the next year, the Organization for Economic Cooperation and Development (OECD) said on Tuesday.

In its latest Economic Outlook, the OECD revised down its global growth forecast, citing a technical assumption that existing tariff rates as of mid-May will remain in place, despite ongoing legal disputes.

The organization warned that if current trends persist – such as rising trade barriers, tighter financial conditions, weakening business and consumer confidence and increased policy uncertainty – they could significantly undermine global growth prospects.

The OECD projected that the US economic growth will slow significantly to 1.6 percent in 2025 and 1.5 percent in 2026.

For the euro area, growth is forecast to reach 1 percent in 2025 and 1.2 percent in 2026, unchanged from previous estimates, as foreign demand gradually recovers. The OECD noted that the region's outlook is supported by easing financial conditions and lower energy prices.

Within the bloc, Germany's economy is expected to expand by 0.4 percent in 2025 and 1.2 percent in 2026.

"The recovery will be driven by domestic demand," the organization noted, adding that private consumption will increase due to low inflation, rising nominal wages and declining domestic policy uncertainty.

As for France, the OECD forecasts GDP growth to slow to 0.6 percent in 2025 amid elevated economic policy uncertainty, before gradually recovering to 0.9 percent in 2026.

Private consumption will become the main growth engine in 2025, as exports will suffer from increased trade tensions and investment will be held back by increased uncertainty, the OECD noted.

However, it predicted that stronger investment and steady consumer spending will help the French economy recover in 2026.