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OECD Cuts Global Growth Forecast Amid Trade Tensions

3/18/2025

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Summary

OECD Lowers Growth

The OECD has slashed its global growth forecasts, citing rising trade tensions and U.S. tariffs as major culprits. It predicts U.S. growth will dip to 2.2% in 2025 and further to 1.6% in 2026, while Canada and Mexico brace for steep declines. Overall, global growth is set to decelerate from 3.2% in 2024 to 3.1% in 2025, igniting worries over inflation.

Summary

UK Growth Forecast Reduced

The OECD has cut the UK's GDP growth forecast for 2025 to 1.4% and 1.2% for 2026, reflecting ongoing economic hurdles. Yet, the UK is still set to be the fastest-growing G7 economy in Europe. Meanwhile, India's growth forecast for FY26 is adjusted to 6.4%, showcasing its resilience amid global economic shifts.

History

Historical Context

The OECD's growth forecast cuts echo the 1930s Great Depression, where rising trade barriers and tariffs stifled global commerce. Similar to then, today's trade tensions threaten economic stability, underscoring the cyclical nature of economic crises driven by protectionism and geopolitical conflicts.

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OECD Lowers Growth

The OECD has slashed its global growth forecasts, citing rising trade tensions and U.S. tariffs as major culprits. It predicts U.S. growth will dip to 2.2% in 2025 and further to 1.6% in 2026, while Canada and Mexico brace for steep declines. Overall, global growth is set to decelerate from 3.2% in 2024 to 3.1% in 2025, igniting worries over inflation.

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