OECD Downgrades Worldwide Growth Outlook Due to Increasing Trade Protections

The Organisation for Economic Co-operation and Development (OECD) has significantly lowered its global economic growth forecasts, indicating that the world economy is heading for a deeper slowdown than previously expected. In its latest report, the OECD projects growth to decline from 3.3% in 2024 to 2.9% in both 2025 and 2026, compared to earlier estimates of 3.1% for 2025 and 3.0% for 2026.

US Economy Impacted by Trade Disputes

The OECD highlights the negative effects of the trade war initiated by the US administration, including new tariffs on China and the European Union, which are clearly impacting US economic growth. According to the International Monetary Fund, US growth fell from 2.5% in 2023 to about 1.8% in 2024, with further weakening expected if trade tensions persist and retaliatory measures escalate.

Risks of Escalating Protectionism

The OECD warns that continued protectionist policies and expanded tariffs could further reduce global growth forecasts. Disruptions in supply chains and slowing global trade will have a compounded negative impact on both emerging and advanced economies. Data from the World Trade Organization shows global trade growth dropping to below 1.5% in 2024, down from 2.7% in 2023, marking the slowest pace since the COVID-19 pandemic.