Reuters: The world economy has proven more resilient than anticipated in the first half of the year, the Organization for Economic Co-operation and Development (OECD) said Tuesday..
“Industrial production and trade were supported by front-loading ahead of higher tariffs,” it said. “Strong AI-related investment boosted outcomes in the United States, and fiscal support in China outweighed the drag from trade headwinds and property market weakness.”
In its updated outlook, the OECD has raised its global growth forecast for 2025 to 3.2%, up from 2.9% in its previous estimate.
Even with the stronger projection, global growth is expected to ease from 3.3% in 2024.
The outlook for 2026 was left unchanged at 2.9% “as front-loading ceases and higher tariff rates and still-high policy uncertainty dampen investment and trade,” the report said.
The OECD cautioned that downside risks remain, citing higher trade barriers, geopolitical tensions and policy uncertainty.
As tariff increases take effect and immigration declines, the US GDP growth is forecast to slow to 1.8% in 2025 and 1.5% in 2026.
Eurozone growth is projected to be 1.2% in 2025 and 1% in 2026, amid rising trade frictions and geopolitical uncertainty.
China’s growth is expected to ease to 4.9% in 2025 and 4.4% in 2026 as tariff pressures mount and fiscal support fades.
The OECD also forecast headline inflation in most G20 economies to fall to an average of 3.4% in 2025 and 2.9% in 2026 as growth moderates and labor market pressures ease.
