Play all audios:
Global economic growth is weakening faster than expected, the the Organisation for Economic Cooperation and Development (OECD) said on Tuesday, as Trump's trade war starts to take a
toll on the US economy. The OECD cut its outlook for global output for the US and most of the G20 leading economies and warned that agreements to ease trade barriers are key to reviving
investment and avoid higher prices. Global growth is expected to be 2.9% in 2025 and 2026, the OECD said in its latest full outlook. The figure has exceeded 3% every year since 2020, when
output plunged because of the pandemic. The OECD said that US growth will slow sharply, falling from 2.8% in 2024 to 1.6% in 2025 and 1.5% next year. The OECD said that the Federal Reserve
likely won't cut rates this year because inflation will remain too high. The latest assessment represents a downgrade to its March interim forecasts, which preceded Trump’s “Liberation
Day” tariff announcements on April 2. Even then, the OECD warned of a “significant toll” stemming from the levies and associated uncertainty over policy. The OECD also cut 2025 forecast for
G20 countries, which include China, France, Japan, India, UK, and South Africa. Álvaro Pereira, the OECD’s chief economist, said countries need to strike deals that would lower trade
barriers. “Otherwise, the growth impact is going to be quite significant,” he said. “This has massive repercussions for everyone.” Compared with the OECD’s last full outlook in December,
growth prospects for almost all countries have been downgraded, said Pereira. “Weakened economic prospects will be felt around the world, with almost no exception,” the OECD said.