OECD Forecasts Slowing Economic Growth in US, Global Economies

The Organisation for Economic Co-operation and Development (OECD) warned in a new report that global economic growth is weakening, citing rising trade barriers and heightened policy uncertainty.

The OECD’s June 3 report slashes its forecast for 2025.

“The global economy has shifted from a period of resilient growth and declining inflation to a more uncertain path,” OECD Secretary-General Mathias Cormann said in a statement. “Our latest economic outlook shows that today’s policy uncertainty is weakening trade and investment, diminishing consumer and business confidence and curbing growth prospects.”

The Paris-based, intergovernmental organization of 38 member nations, mostly with high-income economies, projected that global GDP will grow just 2.9 percent in 2025 and 2026, down from 3.3 percent last year.

The group expected the slowdown to be most pronounced in the United States, where growth is forecast to fall to 1.6 percent in 2025—nearly half of last year’s pace.

The report attributes much of the expected downturn to escalating trade tensions, particularly the recent U.S. tariffs that have raised effective rates on imports to their highest level since 1938. The OECD estimates that these increases, and retaliatory measures by China and others, now have an impact on trade equivalent to more than 2 percent of global GDP.

“Governments need to engage with each other to address any issues in the global trading system positively and constructively through dialogue—keeping markets open and preserving the economic benefits of rules-based global trade for competition, innovation, productivity, efficiency, and ultimately growth,” Cormann added.

Trump Administration Responds

The White House responded to the report in an emailed statement to The Epoch Times, calling it another example of “a growing list of doomsday prognostications that are untethered to reality.”

“The data is clear: investment in real business equipment surged by nearly 25% in Q1 of 2025; real disposable personal income grew by a robust .7% month-over-month in April; and the Atlanta Fed now estimates Q2 GDP growth will accelerate to 4.6%,” White House spokesman Kush Desai said in the statement.

“Global growth does not need to be contingent on other countries taking advantage of the United States with unfair trade policies that undermine American industries and workers.”

President Donald Trump also defended his trade policy in a pair of recent posts on his Truth Social account.

On June 2, he wrote, “If other Countries are allowed to use Tariffs against us, and we’re not allowed to counter them, quickly and nimbly, with Tariffs against them, our Country doesn’t have, even a small chance, of Economic survival.”

In a separate post on Tuesday morning, he added, “Because of Tariffs, our Economy is BOOMING!”

The OECD report notes that the United States has raised the average effective tariff on imported goods from 2 percent in 2024 to 15.4 percent by mid-May. China has responded with a 10-point increase on U.S. imports. New levies also target goods from Canada, Mexico, and other trading partners, which the report states adds complexity and cost to global supply chains.

The report contends that tariffs have raised prices for consumers and inputs for businesses. The organization warned that inflation could rise further in countries imposing tariffs, and that delays in reaching central bank targets are now expected.

For G20 nations, headline inflation is projected to fall from 6.2 percent last year to 3.6 percent in 2025 and 3.2 percent in 2026. Per the OECD’s estimates, the United States is expected to buck that trend, with annual inflation rising to just under 4 percent next year and remaining above target in 2026.

Beyond trade, the OECD cited rising public debt, tighter financial conditions, and geopolitical instability as additional risks. Governments, it said, must restore fiscal discipline while leaving room for future shocks.

The report calls on policymakers to roll back new trade barriers and deepen international cooperation to revive growth. It also urges countries to boost investment, particularly in housing and digital infrastructure, and to pursue structural reforms aimed at improving productivity.