Global GDP growth seen slowing to 3.1% in 2025

The Organization for Economic Cooperation and Development (OECD) has forecasted a gradual slowdown in global economic growth, projecting the world’s gross domestic product (GDP) to expand by 3.1 percent in 2025 and further ease to 3 percent in 2026.

In its latest Economic Outlook released Monday, the OECD attributed the tempered forecast to increasing trade barriers among G20 economies, alongside mounting geopolitical tensions and policy uncertainties, all of which are weighing on investment decisions and household spending.

The projections mark a downward revision from the OECD’s previous estimate in December 2024, which expected global growth to hold steady at 3.3 percent for both 2025 and 2026.

Despite the moderation, the OECD noted that global economic activity remains on relatively stable footing, supported by robust performances from several emerging markets and sustained growth in services and consumption. However, the organization warned that elevated geopolitical risks, persistent inflation concerns in certain regions, and protectionist trade measures could dampen business confidence and slow recovery momentum.

The OECD also emphasized the importance of continued structural reforms and international cooperation to foster sustainable growth. It advised governments to strengthen economic resilience by encouraging open trade, investing in digital and green transitions, and maintaining prudent fiscal management.

For advanced economies, growth is projected to moderate as monetary policies remain tight to manage inflation. In contrast, emerging markets are expected to drive much of the global expansion, though they too face challenges such as tighter financial conditions and external vulnerabilities.

The OECD added that risks to the outlook remain tilted to the downside, with conflicts in various regions, volatility in commodity prices, and shifts in monetary policy all posing potential headwinds.