The Organisation for Economic Co-operation and Development (OECD) has lowered its growth forecast for both the U.S. and global economies, citing the likely impacts of trade tariffs.
The OECD reduced its projection of U.S. GDP to 2.2% in 2025 and 1.6% in 2026. Previously the organization expected the American economy to expand 2.4% this year and 2.1% in 2026.
As for the global economy, the OECD sees it growing by 3.1% in 2025 and 3.0% in 2026. That’s down from an earlier projection of 3.3% growth in the year ahead.
The organization said it lowered its outlook due to “higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty.”
The OECD said its latest projections were “based on an assumption that bilateral tariffs between Canada and the United States and between Mexico and the United States are raised by an additional 25 percentage points on almost all merchandise imports from April.”
If the tariff increases were lower, or applied to fewer goods, economic activity would be stronger and inflation would be lower than projected, reads the report.
Founded in 1961, the OECD is an intergovernmental organization with 38 member countries. It is focused on stimulating economic progress and world trade.
