Old Navy and GAP single -trade transactions will be pulled by the Times Square in New York City on April 9, 2025 on April 9, 2025.
Angela Weiss | AFP | Getty pictures
The economic growth forecast for the United States and worldwide was further reduced by the organization for economic cooperation and development, since the great turbulence of President Donald Trump weighs expectations.
The US growth prospects were revised to only 1.6% this year and downwards in March 2026. In March, the OECD still expected an expansion of 2.2% in 2025.
The consequences of Trump's tariff policy, increased economic policy uncertainty, a slowdown of net immigration and a smaller federal employee were cited as reasons for the latest downgrading.
In the meantime, global growth will also be lower than previously forecast, with the OECD says that “the slowdown in the USA, Canada and Mexico is concentrated”, while other economies are expected to see smaller downward revision.
“The global GDP growth is expected to slow down from 3.3% in 2024 to 2.9% this year and in 2026 … With regard to the technical assumption that the tariff rates will be maintained from mid-May despite legal challenges,” said the OECD.
Before that, it had predicted global growth of 3.1% this year and 3% in 2026.
“The global prospects are becoming increasingly difficult,” says the report. “Significant increase in trade barriers, stricter financial conditions, weaker business and consumer confidence and increased political uncertainty will have a disadvantageous effect on the growth prospects if they remain.”
In the past few weeks, frequent changes in the tariffs have continued, which has led to uncertainty in global markets and in the economies. The latest developments include Trump's mutual, country-specific levies that were put down by the US Court of International Trade before they were restored by an appellate court, as well as Trump that he would double steel tasks to 50%.
“The reasons why we have downgraded almost all of us in our forecast is that the uncertainty has reached trade and economic -political uncertainty unprecedented levels,” Alvaro Pereira, chief economist of the OECD, told CNBCS “Squawk Box Europe” on Tuesday.
“As a result, we have found that consumption and investments have dropped, and in fact, activity indicators have dropped. And if you take this into account, and we also try to appreciate in our models, you can see that there will be less growth, fewer jobs and more entitlement to inflation.”
US inflation to rise
The OECD has adapted its inflation forecast and said, “higher trading costs, especially in countries that increase tariffs, will also increase inflation, although their effects are partially compensated for by weaker raw material prices.”
The effects of tariffs on inflation have been hotly debated, with many political decision -makers and global analysts of the central bank point out that it is still unclear how the taxes will affect prices and that a lot of factors such as potential countermeasures depend.
The Inflation prospects of the OECD show a remarkable difference between the USA and some of the other major economies in the world. For example, while G20 countries are now expected to have an inflation of 3.6% in 2025 – compared to 3.8% in the estimate of March – the projection for the United States has increased to 3.2%, compared to earlier 2.8%.
The US inflation could even work 4% towards the end of 2025, said the OECD.
“At the level of something very important”
The Pereira of the OECD also discussed developments in technology such as AI and how they affect productivity – and give the USA an advantage.
“Productivity was very strong in the United States, and we expect this to probably expand the gap between the United States [and] The rest of the world, precisely because exposure to AI is higher by sectors in the USA, “he said.
With technology such as AI, robotics and quantum computers, there is the possibility of a “significant revival of productivity,” he said – but only if trade barriers are reduced and the investment and consumer increases have increased.
“I think if we are able to meet trade agreements between the countries, not only between China, the United States, but also between other parts of the world, and if we are able to reduce uncertainty, we believe that we are very important,” said Pereira.
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