The global economic outlook is darkening, with the OECD's latest Economic Outlook projecting a slowdown due to trade policy uncertainty, tighter financial conditions, and waning confidence. According to the report released on June 3, 2025, global growth is expected to slow from 3.3% in 2024 to 2.9% in both 2025 and 2026.

The slowdown is concentrated in major economies, including the United States, which is projected to see its GDP growth fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026. Similarly, China's growth is expected to moderate from 5.0% to 4.7% in 2025 and 4.3% in 2026. The Euro area, however, shows a modest strengthening, with growth projected to increase from 0.8% in 2024 to 1.0% in 2025 and 1.2% in 2026.

Inflationary pressures, while expected to moderate in G20 economies from 6.2% to 3.6% in 2025, remain a concern. The report warns that new trade barriers and retaliatory tariffs could push inflation higher. "The global economy has shifted from a period of resilient growth and declining inflation to a more uncertain path," said OECD Secretary-General Mathias Cormann, urging governments to address trade issues constructively.

The Outlook also highlights risks from potential trade fragmentation, persistent inflation, and increased fiscal pressure from higher debt payments. The report recommends that central banks remain vigilant while considering policy rate reductions in economies where inflation is projected to moderate. Governments are urged to ensure long-term debt sustainability and pursue structural reforms to reinvigorate investment and improve productivity. OECD Chief Economist Álvaro Santos Pereira noted that investment has been holding back growth and stressed the need for a bold policy reform agenda to boost it.

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