The Organization for Economic Co-operation and Development (OECD) lowers its forecasts for global economic growth

 The OECD lowers its global forecasts

The Organization for Economic Co-operation and Development (OECD) has dramatically lowered its forecast for global economic growth, noting that the global economy is headed toward a deeper slowdown than expected just months ago.

According to its report issued on Tuesday, the organization expects growth to decline from 3.3 percent in 2024 to 2.9 percent during 2025 and 2026, compared to previous estimates in March that indicated growth at 3.1 percent for 2025 and 3.0 percent for 2026.

America is in the heart of the economic storm

The organization indicated that the negative effects of the trade war launched by the administration of US President Donald Trump, including new customs restrictions on China and the European Union, have begun to be clearly reflected in US economic growth.

International Monetary Fund data indicate that US growth declined from 2.5 percent in 2023 to about 1.8 percent in 2024, with expectations of further weakness if trade tensions continue and reciprocal measures from trading partners escalate.

Escalating trade protectionism threatens global recovery

The organization warned that the continuation of the protectionist approach and the expansion of the scope of customs duties may lead to a further reduction in global growth expectations, noting that the fragmentation of supply chains and the slowdown in global trade will have a multiplier effect on emerging and developed economies alike.

According to World Trade Organization data, global trade growth fell to less than 1.5 percent in 2024, compared to 2.7 percent in 2023, which is its lowest level since the Covid-19 crisis.

Outlook: The risks are greater than the opportunities

The OECD concluded its report by emphasizing that the risks of decline outweigh the chances of recovery, calling on governments to adopt flexible financial policies, avoid trade closure, and work to stimulate sustainable investments and innovation to contain the slowdown.

She stressed the importance of restoring confidence in the global trading system and stopping the trade escalation that threatens the foundations of long-term growth.