OECD lifts global growth outlook despite US tariffs

The world economy is proving more resilient than expected to US president Donald Trump’s sweeping import tariffs, according to the OECD.

The Paris-based organisation now forecasts global growth of 3.2 per cent in 2025, up from its June estimate of 2.9 per cent. Growth is expected to ease back to 2.9 per cent in 2026 as the impact of tariffs deepens and early stockpiling by companies fades.

The OECD said many firms rushed shipments to the US ahead of tariff deadlines, temporarily boosting trade and production. Strong US investment in artificial intelligence and increased Chinese government spending also supported growth.

In the eurozone, growth is set to reach 1.2 per cent this year, before slowing to 1.0 per cent in 2026. The US economy will expand by 1.8 per cent in 2025, down sharply from 2.8 per cent last year, and slip further to 1.5 per cent next year.

The OECD warned that risks remain high. The overall effective US tariff rate climbed to nearly 20 per cent in August. That is the highest level since the 1930s. Further rises could weigh on investment, trade, and consumer prices. Early signs of slowdown have already appeared in Germany, South Korea and Brazil.

While the organisation sees potential upside from easing trade restrictions or faster advances in AI, it cautioned that the “full effects” of tariffs are only beginning to show.

^{The Organisation for Economic Cooperation and Development (OECD) headquarters in Paris © JOEL SAGET / AFP}