Global Growth Weakens! OECD Cuts Forecast to 2.9% by 2026 Amid Policy Uncertainty

Paris, Sept 26, 2025 – The Organisation for Economic Co-operation and Development (OECD) has warned that the global economy is losing momentum, with growth projections trimmed due to policy uncertainty, trade tensions, and geopolitical risks weighing on confidence and investment.

The OECD now expects global GDP to expand by 3.2% in 2025, before slowing further to 2.9% in 2026, down from 3.3% in 2024. The downgrade reflects growing headwinds from new tariffs, fragile trade flows, and uncertainty over monetary policy paths in major economies.

“Policy instability is undermining business and consumer confidence worldwide.”
— OECD Report

📉 Key Pressures

• Trade Tensions: Fresh U.S. tariffs and retaliatory measures threaten global trade flows.
• Inflation & Interest Rates: Although inflation is easing, central banks remain cautious, keeping borrowing costs elevated.
• Political Risks: Elections and geopolitical conflicts continue to cloud the global outlook.

🌍 Regional Impact

• United States: Growth supported by resilient consumer spending but trade and investment are slowing.
• Europe: Energy challenges and stubborn inflation remain key drags.
• Asia: China and India remain growth engines, though exports may stumble amid trade frictions.

📊 Analyst Views
Economists caution that if major economies continue pursuing protectionist policies without meaningful cooperation, global growth could slow even faster than the OECD’s forecast.