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With many economies appearing more resilient than expected so far this year, the OECD(Organisation for Economic Co-operation and Development) upgraded its global economic growth forecast.
The OECD now expects global growth of 3.2% this year, compared to the 2.9% expansion it had forecast in June. Expectations for 2026 were unchanged at 2.9%. This would mark a slowdown from the 3.3% growth seen in 2024.
Growth expectations for the U.S. were also lifted, to 1.8% for 2025, compared to June’s 1.6% estimate. This still marks a significant fall from 2024′s 2.8% growth, however. OECD forecasts 1.5% growth for the U.S. in 2026.
The organization indicated in a new report that global growth was more resilient than anticipated in the first half of 2025, especially in many emerging-market economies; Industrial production and trade were supported by front-loading ahead of higher tariffs; On the flip side, strong AI-related investment boosted outcomes in the United States and fiscal support in China outweighed the drag from trade headwinds and property market weakness.
Alvaro Pereira, chief economist of the OECD is optimistic about the global economy given that individual economic events in emerging markets including Brazil, Indonesia and India also boosted the world economy.
Although global economy shows somewhat resilience to some extent, Pereira said that OECD has not changed significantly the forecast for virtually all the G20 countries and still expects a slowdown in the second part of the year after this front loading took place in the first quarter given the tariff impact still to come.
The OECD warned however that “significant risks to the economic outlook remain based on investment and trade continue to be hit by high levels of policy uncertainty and elevated tariffs. The flip-flopping policies are having significant negative impact on global economy. The OECD’s Pereira said that the tariff shock is bringing more inflationary pressures in many countries.
The OECD now expects headline inflation to amount to 3.4% across G20 countries in 2025, slightly lower than June’s 3.6% projection. Inflation expectations for the U.S. were revised down more sharply, with the OECD now forecasting price rises of 2.7% in 2025, down from the previous 3.2% forecast.
Finally, OECD noted that high and volatile crypto-asset valuations also raise financial stability risks given growing interconnectedness with the traditional financial system. On the upside, reductions in trade restrictions or faster development and adoption of AI technologies could strengthen growth prospects.
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