OECD Report: Global Economic Growth Projected to Decline Gradually

Kathmandu – The Organisation for Economic Co-operation and Development (OECD) has projected that global economic growth will continue to decline in the coming years. According to its latest report, the world economy, which grew by 3.3% in 2024, is expected to slow down to 3.2% in 2025 and further fall to 2.9% in 2026.

The OECD highlighted several key reasons behind this slowdown, including the end of advanced trade supply mechanisms, rising tariffs, and policy uncertainty, all of which have weakened investment and international trade.

Despite the weak long-term outlook, some emerging economies showed stronger-than-expected performance in the first half of 2025. This was mainly due to businesses accelerating shipments before tariff hikes, leading to a temporary boost in production and trade.

Meanwhile, the United States has sharply raised tariffs on most of its trading partners. By the end of 2025, the OECD noted that the average U.S. tariff rate had reached 19.5%, the highest level since 1933.

The report also warns of additional risks to future growth, such as further tariff hikes, inflationary pressures, fiscal imbalances, and financial market volatility.

U.S. economic growth is projected to fall to just 1.5% by 2026, with technology investments providing some support but overall growth being hindered by tariff and immigration policies.

The European economy is also expected to remain sluggish, with growth forecast at 1.2% in 2025 and 1.0% in 2026. While easy credit conditions may provide some relief, trade barriers and geopolitical risks will continue to weigh on the region.

In conclusion, the OECD stressed that deep structural reforms are essential to improve living standards and make effective use of new technologies in the face of these global economic challenges.