Global growth vulnerable to fresh trade tensions: OECD

The Organization for Economic Cooperation and Development (OECD) warned that global growth is vulnerable to any new trade tensions, although it has held up better than expected, supported by a boom in artificial intelligence (AI) investment that has helped offset some of the shocks from increased US tariffs.

Mathias Cormann, the Secretary-General of the OECD, said the trade shocks triggered by US President Donald Trump's tariff hikes had so far proved relatively mild, but added their costs were likely to rise.

The Paris-based organization, in its Economic Outlook, forecast global growth would slow modestly from 3.2% in 2025 to 2.9% in 2026, leaving its forecasts untouched from its last estimates in September. It predicted a rebound to 3.1% in 2027.

OECD head Mathias Cormann said the trade shocks triggered by US President Donald Trump's tariff hikes had so far proved relatively mild, but added their costs were likely to rise.

The US economy is forecast to grow 2% in 2025, revised up from 1.8% in September, before slowing to 1.7% in 2026 - up from 1.5% predicted in September.

The OECD also stated that AI investment, fiscal support and expected Federal Reserve rate cuts are helping offset the drag from tariffs on imported goods, reduced immigration and federal job cuts.