Resilient in face of Trump tariffs, world economy is forecast to grow 3.2% this year, OECD says

Ship containers are stacked at the Panama Canal Balboa port, operated by the Panama Ports Company, in Panama City, Sept. 20, 2025. (AP Photo/Matias Delacroix, File)

WASHINGTON — The world economy has proven surprisingly durable in the face of U.S. President Donald Trump’s trade wars, the Organization for Economic Cooperation and Development said Tuesday, upgrading its outlook for global and U.S. economic growth this year.

The 38-country OECD now forecasts that the world economy will grow 3.2 per cent this year, down a tick from 3.3 per cent in 2024 but an improvement on the 2.9 per cent it had predicted for 2025 back in June. The organization, which does economic research and promotes international trade and prosperity, expects global growth to slow to 2.9 per cent next year.

The OECD also raised its forecast for U.S. growth this year – to two per cent, up from the 1.6 per cent it had forecast in June. Still, even with the upgrade, the American economy – the world’s largest -- would have grown considerably more slowly than it did in 2024 (2.8 per cent).

Since returning to the White House in January, Trump has overhauled U.S. trade policy, imposing taxes on imports to build a protectionist wall around the previously open American economy.

The trade barriers were widely expected to slow growth and push up costs. But his tariffs have come in lower than the ones he threatened to impose in the spring. Many companies beat the levies by importing foreign goods into the United States before they took effect. And the U.S. and world economies are getting a boost from massive investments in artificial intelligence.

“The global economy has been resilient this year, despite concerns about a sharper slowdown in the wake of higher trade barriers and significant policy uncertainty,” OECD Secretary-General Mathias Cormann wrote in a commentary accompanying the forecasts. Still, he added: “We expect higher tariffs to gradually feed through to higher prices, reducing growth in household consumption and business investment.’’

The OECD expects China, the world’s No. 2 economy, to grow five per cent this year, same as in 2024. It sees the 20 economies that share the euro currency collectively expanding 1.3 per cent in 2025, lacklustre but up from 0.8 per cent in 2024.

India, which has supplanted China as the world’s fastest-growing major economy, is expected to generate 6.7 per cent growth this year, up from 6.5 per cent in 2024.

Paul Wiseman, The Associated Press