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OECD trims global growth outlook to 2.9% as U.S. tariffs bite

It lowered the U.S. projection to 1.6%, reflecting lingering policy uncertainty

FILE - Shipping containers are seen ready for transport at the Guangzhou Port in the Nansha district in southern China's Guangdong province, April 17, 2025. (AP Photo/Ng Han Guan, File)
FILE - A view of the European currency Euro sculpture, at Germany's main financial district in Frankfurt, Germany, Wednesday, April 9, 2025. (AP Photo/Martin Meissner, File)
FILE - The United States Steel Corporation's Edgar Thomson Plant in Braddock, Pa., on Friday, April 11, 2025. (AP Photo/Gene J. Puskar, File)
A woman walks past a poster with the OECD logos before the launch of the OECD Economic Outlook and the 2025 Ministerial Council Meeting at the OECD Headquarters in Paris, France, June 3, 2025. REUTERS/Benoit Tessier

Overview

  • The OECD cut its forecast for world GDP growth from March’s 3.1% and 3.0% to 2.9% for both 2025 and 2026.
  • U.S. output is projected to slow to 1.6% in 2025 and 1.5% in 2026 as higher tariffs raise costs and dampen business confidence.
  • The Paris-based forecaster warned that further protectionist measures could intensify supply-chain disruptions and fuel inflationary pressures.
  • A temporary tariff truce with China and a postponement of EU duties until July 9 offer tentative relief for beleaguered traders.
  • Central banks are adjusting to the downgrade, with the Federal Reserve expected to hold rates through 2025 before cutting to 3.25–3.5% by late 2026.