OECD's latest economic outlook shows a slight slowdown ahead: global GDP growth is set to dip from 3.3% in 2024 to 3.2% in 2025 and further to 2.9% in 2026. 📉 Although the first half of 2025 surprised on the upside—thanks to businesses fast-tracking orders before tariff hikes—the darker clouds of higher trade barriers and policy uncertainty are casting a longer shadow.
The OECD flags that the revision stems from front-loading winding down, rising tariffs, and lingering policy uncertainty—all dampening investment and trade.
Case in point: US tariff rates jumped in May, pushing the effective rate to 19.5% by the end of August—the highest since 1933. 🚧 Many tariff changes roll out over time, and companies have been absorbing the extra costs in their profit margins so far.
The outlook also highlights risks that could push growth even lower, including:
- Further tariff escalations
- Fresh inflation spikes
- Tighter fiscal conditions
- Financial market jitters
Zooming in on major players, the US is expected to see growth ease from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026, as high-tech investments battle tariff drag and lower immigration. In the eurozone, the forecast sits at 1.2% for 2025 and 1.0% for 2026, buoyed by easier credit but capped by trade frictions and geopolitical uncertainty.
Looking forward, the OECD stresses that structural reforms—think digital upgrades, smart regulations, and education tweaks—are essential to boost living standards and make the most of game-changing tech like AI. 🤖 For young pros in South and Southeast Asia, staying agile and skill-ready could be the key to riding out the slowdown and tapping into tomorrow's growth sectors.
Reference(s):
OECD's new global GDP growth forecast: 3.2% in 2025, 2.9% in 2026
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