Paris, Mar. 17, (dpa/GNA) – Global growth in 2025 and 2026 has been revised down by the Organisation for Economic Co-operation and Development (OECD), partly due to the tariffs spat initiated by US President Donald Trump.
The OECD said in a report on Monday that it is predicting global growth of 3.1% this year instead of 3.3%, while 2026 could see 3.0% growth rather than the 3.3% the Paris-based institution previously forecast.
“Recent activity indicators point to a softening of global growth prospects,” the report said. “Policy uncertainty has been high and significant risks remain. Further fragmentation of the global economy is a key concern.”
The OECD said that if bilateral tariffs are raised further on all non-commodity imports into – and exports from – the United States, global output could fall by around 0.3% by the third year.
A simulation of 10% tariffs suggests Mexico could be among the hardest hit with a 1.3% drop in growth from the baseline in the third year of bilateral action, while the US would see a 0.72% drop off.
“Agreements that lower tariffs from current levels could result in stronger growth,” the OECD added.
Irrespective of tariffs, the OECD expects India to grow the fastest in 2025 and 2026 with 6.4% and 6.6% real gross domestic product (GDP) growth predicted.
Mexico is the only major nation listed which might see a fall. Fellow US tariff victim Canada could show little growth and the eurozone is predicted to grow by 1.0% and 1.2% in 2025 and 2026 respectively.
GNA