Global leaders are urged to act decisively, as the Organization for Economic Co-operation and Development (OECD) calls for increased collaboration to tackle the mounting economic uncertainty. The OECD has significantly lowered its global economic growth projections, now anticipating a decline from 3.3% in 2024 to 2.9% in both 2025 and 2026, a clear indicator of the challenging environment demanding coordinated action.
The OECD’s latest outlook report states unequivocally that “weakened economic prospects will be felt around the world, with almost no exception.” It predicts that “lower growth and less trade will hit incomes and slow job growth,” signaling a pervasive negative impact on livelihoods globally. The United States, Canada, Mexico, and China are specifically identified as major contributors to this anticipated global economic decline.
Further compounding the challenges, the OECD warns that “protectionism” will lead to increased inflation, causing costs for goods and services to rise. This inflationary pressure, combined with already high debt levels, poses a severe risk for developing nations. The report’s final suggestion is for “governments [to] work together to tackle uncertainty and pursue reforms to foster growth and jobs.”
In response to this grim outlook, the OECD advises central banks to “remain vigilant” regarding inflation, even if immediate interest rate hikes are not expected. Crucially, it also advocates for increased investment to revive economies and improve public finances, emphasizing that collaborative efforts are essential to overcome the current economic headwinds and restore confidence.