OECD raises US, euro zone growth targets as world economy proves ‘resilient’
PARIS – The world economy has been “surprisingly resilient” in the face of adversity this year, the Organisation for Economic Co-operation and Development (OECD) said on Dec 2, raising its growth estimates for key economies, notably the US and the euro zone.
The gradual implementation of new trade policy barriers, political uncertainty and declining investment has put the brakes on growth, but demand has held up astonishingly well, it said in its latest world economic outlook report.
This was due to easier global financial conditions, supportive macroeconomic policies, real income growth and strong demand for
new AI-related investments
, particularly in the United States, the organisation said.
US gross domestic product (GDP) growth is now estimated at 2 per cent in 2025, 0.2 points more than in the
OECD’s previous outlook
, published in September.
For the euro zone, the OECD now forecasts 1.3 per cent growth, 0.1 point more than in September.
The world economy overall is on course for 3.2 per cent growth in 2025, down from 3.3 per cent in 2024, before slowing to 2.9 per cent growth in 2026, and rebounding again in 2027, when a 3.1 per cent expansion is forecast.
US growth will taper off to 1.7 per cent in 2026, while euro zone growth is likely to come in at 1 per cent. Both estimates are better than what was forecast in September.
“The global economy has shown surprising resilience in 2025,” the OECD said.
Growth is, however, expected to soften during the second half of 2025, as higher tariffs translate into higher costs for businesses and consumers, and elevated geopolitical and policy uncertainty continues to weigh on domestic demand.
Global growth is then expected to recover through 2026, helped by the fading impact of higher tariff rates, favourable financial conditions, supportive macroeconomic policies and lower inflation, with emerging-market economies in Asia continuing to account for the majority of global growth.
But there are downside risks, as the outlook “remains fragile”, the OECD cautioned.
“A further rise in trade barriers, especially around critical inputs, could inflict significant damage on supply chains and global output,” it said.
“High asset valuations based on optimistic expectations of AI-driven corporate earnings pose a risk of potentially abrupt price corrections,” it said, also warning that fiscal vulnerabilities may push long-term sovereign yields higher, tightening financial conditions and hampering growth. AFP