Trade restrictions threaten global economic growth – OECD

The Organization for Economic Co-operation and Development (OECD) warns that geopolitical and political uncertainty, as well as further trade fragmentation, could hurt global economic growth. This is stated in the latest interim forecast of the organization.

The OECD expects global GDP growth to slow to 3.1% in 2025 and 3% – in 2026, with significant differences between countries and regions. The previous forecast predicted global economic growth of 3.3% over the next two years.

GDP growth in the United States is projected at 2.2% this year, and is expected to slow to 1.6% in 2026. The organization forecasts the eurozone economy to grow by 1% in 2025 and 1.2% – in 2026. China’s growth this year will slow from 4.8% to 4.4% in 2026.

According to OECD Secretary-General Matthias Kormann, the global economy has demonstrated some real resilience, with growth remaining stable and inflation moving downward. However, there are some signs of weakness caused by heightened political uncertainty.

“Increased trade restrictions will contribute to higher costs for both production and consumption. It is important to ensure a well-functioning rules-based international trading system and keep markets open,” he said.

The OECD also draws attention to the risk of macroeconomic volatility. An unexpected downturn, policy change, or deviation from the projected path of inflation could trigger a market correction, significant capital outflows, and exchange rate fluctuations, especially in emerging markets. High levels of public debt and high asset valuations further exacerbate these risks.

In order to reduce the decline in production in developed and developing economies, the institution recommends “ambitious structural reforms” to increase productivity and promote the introduction of new technologies by strengthening market competition and eliminating excessive regulatory burdens on companies.

In January, the UN predicted that global economic growth would remain at 2.8% in 2025. A moderate boost to economic activity could come from lower inflation and monetary policy easing.