OECD lowers global growth forecast for 2025-26 amid trade, policy risks

By Tuba Ongun

ANKARA (AA) – The Organization for Economic Cooperation and Development (OECD) on Monday lowered its global growth forecasts for 2025 and 2026, pointing to rising trade barriers in several G20 economies and increasing policy uncertainty as key factors restraining investment and household spending.

In its latest Economic Outlook, the OECD projects global GDP growth to slow from 3.2% in 2024 to 3.1% in 2025 and 3.0% in 2026. These figures mark downward revisions of 0.2 percentage points for 2025 and 0.3 percentage points for 2026 compared to its December 2024 forecast.

The OECD forecasts a notable slowdown in the US economy, with growth expected to ease from 2.2% in 2025 to 1.6% in 2026, reflecting downward revisions of 0.2 and 0.5 percentage points, respectively.

In the euro area, GDP growth projections have been cut by 0.3 percentage points for both 2025 and 2026, with growth anticipated to remain weak at 1% and 1.2%, respectively.

Despite continued fiscal support, China’s growth is expected to decelerate from 4.8% in 2024 to 4.4% by 2026, influenced by structural challenges and weaker export demand.

For Türkiye, the OECD has raised its 2025 growth forecast by 0.5 points to 3.1%, while slightly lowering its 2026 forecast by 0.1 point to 3.9%.

- Inflation remains challenge

Inflation continues to be a concern for the global economy. Headline inflation across G20 economies is expected to decline from 3.8% in 2025 to 3.2% in 2026 but is projected to remain above central bank targets in many countries.

Services inflation remains particularly persistent, with a median rate of 3.6% across OECD member states.

The OECD cautioned that heightened geopolitical and policy uncertainties could intensify risks, warning that an escalation of trade restrictions could reduce global output by 0.3% within three years and raise inflation by 0.4 percentage points annually over the same period.