The economic impact of US tariffs and political instability has been less severe than expected. The Organisation for Economic Co-operation and Development (OECD) confirmed its forecast of 3.2 percent for global growth this year. “The global economy has been resilient this year, despite the anticipated slowdown due to increasing trade barriers and significant political uncertainty,” the OECD report, presented Tuesday in Paris, stated.
Experts predict global economic growth of 2.9 percent for the coming year. An increase to 3.1 percent is not expected until 2027. According to the OECD report, Germany will experience only modest, unchanged growth of 0.3 percent in 2025. This is projected to rise to one percent in 2026.
Among the reasons cited for the resilience of the global economy is the preparation for the US tariffs: US President Donald Trump’s announcements initially led to increased imports into the US. This trend has since subsided. The OECD forecasts growth of two percent for the US this year and 1.7 percent in 2026. These figures represent an increase of 0.2 percentage points in each case compared to the previous forecast.
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Due to the numerous trade agreements the US has now signed, the effective tariff rate on imports was 14 percent at the end of November. In June, it was 15.4 percent. Growth of 1.3 percent is expected in the Eurozone for 2025, an increase of 0.1 percentage points. Growth of 1.2 percent is projected for 2026.
However, experts emphasize that the outlook is fragile. A further increase in trade barriers, particularly for critical products such as rare earth elements, could significantly damage global production. According to experts, the AI sector risks abrupt price corrections, as optimistic expectations for AI are leading to high asset valuations. Another risk lies in “fiscal weaknesses,” which could lead to an increase in government bond yields.
In light of increased protectionism and political uncertainty, the OECD advocates for the implementation of “ambitious structural reforms” to support growth. This included, in particular, measures that promote innovation and productivity.
“Constructive dialogue between countries is crucial to ensuring a lasting solution to trade disputes and improving economic prospects,” the report states. Well-functioning, open global markets mean higher living standards and stronger growth.
The Paris-based OECD advises industrialized countries on economic policy issues and regularly publishes forecasts on the global economy.
AFP – Translated by Blackout News