OECD lowers global growth outlook on trade tensions

In its latest report published on Monday, the Organization for Economic Co-operation and Development (OECD) lowers global growth outlook on trade tensions, seeing stronger inflation pressures.

Additional takeaways

OECD cuts US 2025 growth forecast to 2.2% from 2.4% and 2026 to 1.6% from 2.1%.

OECD cuts Canada's 2025 and 2026 growth forecasts to 0.7% from 2%.

OECD trims 2025 global growth forecast to 3.1% from 3.3% and cuts 2026 to 3% from 3.3%.

Higher-than-expected inflation could prompt more restrictive monetary policy and spook financial markets.

OECD raises the 2025 Chinese growth forecast to 4.8% from 4.7%, leaving the 2026 forecast unchanged at 4.4%.

Simulation shows that a broad-based trade war will cost US households $1600 and cost public finances more than extra tariff income generates.

OECD slashes Mexico's 2025 growth forecast to -1.3% from 1.2%, cuts 2026 outlook to -0.6% from 1.6%.

Simulation shows that a broad-based trade war could shave 0.3 percentage points off global growth and 0.7 percentage points for the US.

Market reaction

Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.

Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.