OECD slashes global growth forecast to 2.9% amid Trump tariffs

Economic Cooperation and Development Organization warned that global economic development will slow down its most vulnerable speed since the Covid-19 epidemic, and reduced its forecast for both 2025 and 2026 because the tariff of President Donald Trump Policies have created extensive uncertainty.

OECD cuts global growth forecast to 2.9% amid tariff tensions

Revised estimates released during the Ministerial meeting of OECD in Paris, the forecast of the group show a huge decline compared to 3.0% for 3.1% and 2026 for the forecast of the group. This recession has come in 2024 after 3.3% global growth and this year it is the second time when the Organization of Paris has cut its prediction.

Trade War Reshapes Economic Landscape

downgrades is mainly stuck with the extensive tariff announcements of Trump, which has pushed the effective tariff rate of America ahead of the level during the Great Depression. The administration imposed a baseline 10% tariff on imports from around the world in April, in which higher rates have been installed on dozens of countries, although many countries have been stopped by July to negotiation.

OECD said, "Global scenario is continuously becoming challenging." It has been "considerable growth" in business barriers, strict financial status and policy uncertainty, which will have adverse effects on development "if this situation remains.

Morgan Stanley Research has also repeated these concerns, and it is estimated that in 2025 the global economy will only increase at a rate of 2.9%, which is less than 3.3% in 2024, and it "slow growth after the COVID epidemic" Said.

United States Bears Heaviest Impact

OECD has cut the most in America's development forecast for 2025, it has been reduced by 2.2% to 1.6%, and it is expected to come to 1.5% even more slow in 2026 of the world's largest economy. China's development estimates have been reduced to 2025 to 4.7%, while Eurozone was unchanged at 1.0%.

The Peterson Institute for International Economics has presented even a horrible result, which has been predicted that the growth of the US will be "stable" this year and the average annual increase in 2025 will be reduced to 0.1%.

OECD chief economist Alvaro Pereira said, "According to our estimates, additional tariffs will reduce the prospects of global growth and will promote inflation, which will be more slow."

Uncertainty has reached the unprecedented level, the economic policy uncertainty index has reached its highest point of this century, whereas in the financial markets, there was a large turmoil in April because the "fear index" reached its third highest level on record.