The Organization for Economic Cooperation and Development’s (OECD) latest Economic Outlook is projecting a slowdown in global growth, revising down expected growth by 0.2 percentage points for 2025 and 0.1 percentage points for 2026. This forecast assumes existing tariff rates as of mid-May will remain in place, despite ongoing legal disputes.
The American economy is expected to take a significant hit, with growth predicted at just 1.6 percent in 2025, 0.6 percentage points lower than the OECD’s March projection. Inflation is expected to ease across most G20 countries; however, the US inflation forecast for this year has been raised by 0.4 percentage points to 3.2 percent.
Globally, risks are skewed to the downside, with rising trade barriers, tighter financial conditions, weakening business and consumer confidence, and increased policy uncertainty potentially undermining the economy. No country is immune to these trends, and if they persist, the consequences for the global economy could be severe.
In France, economic growth is projected to slow from 1.1% in 2024 to 0.9% in 2025 due to weaker carry-over effects and constraints on public spending. Fiscal tightening will weigh on growth, but its impact is expected to be partly offset by the effects of disinflation and easing area-wide monetary policy. Private consumption is projected to contribute significantly to growth, with real wages continuing to increase as inflation moderates.
The OECD report highlights the need for consistent adherence to a medium-term fiscal strategy to reduce government debt significantly. Fostering stronger potential growth through digital technology adoption and reduced regulatory barriers will enhance productivity and help achieve fiscal goals. Reforms in social benefits and pensions are boosting labor participation, but further efforts are needed to integrate workers and reduce the impact of socio-economic background on educational outcomes.
Global economy is at a fragile state with series of uncertainties amidst raging Tarrifs hike especially from USA.