The Organisation for Economic Co-operation and Development (OECD) forecasts that global economic growth will continue to slow in 2025, mainly due to rising trade tensions, prolonged inflation, and tight financial conditions. Among these factors, the uncertainty surrounding U.S. tariff policies is expected to exert one of the most significant negative impacts.
Global GDP Growth Expected to Decelerate in 2025
According to the OECD, global GDP is projected to grow by only 2.9% in 2025, down from 3.3% in 2024 and below the earlier forecast of 3.1%. Growth is expected to remain steady at this level through 2026.
Countries such as Italy, Norway, France, Mexico, and Germany are anticipated to experience the slowest growth, while Costa Rica, Denmark, Ireland, Poland, and Israel are projected to lead in economic expansion.
Russ Mould, Chief Investment Officer at AJ Bell, commented that while the downward revision is modest, it is “enough to unsettle investors, especially in the mining sector, where metal prices may come under pressure due to weaker demand.”
The situation is further strained as the 90-day suspension period on new U.S. tariff policies nears its end, pushing countries to accelerate trade negotiations with the Trump administration. Sources suggest that President Trump expects to receive “the best possible offers” by midweek to avoid a trade stalemate.
For 2025, the OECD forecasts that global output will reach 2.6%, with the U.S. economy growing modestly by 1.1%.
Inflation Outlook for 2025
Inflation among OECD member countries is expected to average 4.2% in 2025, up from the 3.7% forecast in December 2024. By 2026, inflation is projected to ease slightly to 3.2%, though still higher than previous expectations.
Turkey is predicted to experience the highest inflation at 31.4%, followed by Colombia, Chile, Poland, Estonia, and Hungary. Meanwhile, Switzerland, Finland, France, Sweden, and Costa Rica are expected to maintain inflation rates below the OECD average.
For the G20 economies, average inflation is forecast at 3.6% in 2025, declining slightly to 3.2% in 2026.
OECD Policy Recommendations
The OECD urges governments to reduce trade barriers and pursue cooperative solutions instead of escalating tariff disputes, as a way to support global growth. It highlights the importance of supply chain reforms, partner diversification, and the harmonization of regulatory standards as key measures to stabilize trade.
On monetary policy, the OECD advises central banks to maintain their focus on curbing inflation, only easing interest rates in economies showing clear signs of disinflation.
Finally, the OECD stresses the need to create a more stable investment environment by reducing policy uncertainty, fostering competition, removing market entry barriers, and expanding access to finance for businesses — all crucial for ensuring sustainable growth amid global trade challenges.