The global economy is projected to experience a modest slowdown in 2025, with the Organisation for Economic Co-operation and Development (OECD) forecasting a 3.1% growth rate, down from 3.2% in 2024. This deceleration is attributed to persistent inflationary pressures, trade policy uncertainties, and geopolitical tensions.
In the United States, growth is expected to slow to 2.2%, while the Euro area anticipates a modest 1.0% expansion. China’s growth is projected at 4.8%, reflecting challenges in domestic demand and the real estate sector.
Inflation remains a concern, with headline inflation in G20 economies projected at 3.8% in 2025, moderating to 3.2% in 2026. Services price inflation remains elevated amidst tight labor markets, and goods price inflation has begun picking up in some countries.
The OECD warns that further trade fragmentation could harm global growth prospects, with increased tariffs potentially raising inflation and suppressing trade growth. The organization emphasizes the need for coordinated policy responses to navigate the complex interplay of inflation, trade dynamics, and geopolitical risks.
