The Organization for Economic Cooperation and Development (OECD) has downgraded its global growth forecasts, warning that US President Donald Trump’s tariffs could stifle the global economy. Following a 3.3% growth last year, the global economy is now expected to grow at a “moderate” rate of 2.9% in 2025 and 2026. Previously, the OECD had projected growth rates of 3.1% for 2025 and 3.0% for 2026. Trump’s recent tariff implementations have shaken financial markets. The OECD, representing 38 mostly wealthy nations, stated that rising trade barriers, tighter financial conditions, declining consumer and business confidence, and political uncertainty will negatively impact growth if they persist. The OECD also cut its 2025 growth forecast for the US from 2.2% to 1.6%, with further slowdown expected in 2026 to 1.5%. Despite Trump’s claims that tariffs are boosting the economy, OECD Chief Economist Alvaro Pereira emphasized that reaching trade agreements is crucial for all parties, including the US. The OECD meeting in Paris this week will address these concerns, with US and EU trade negotiators set to hold discussions amid threats of additional tariffs.
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