OECD ups global growth forecast but warns of protectionism risk

Author: APP

The OECD raised Wednesday its 2025 global growth forecast to 3.3 percent but warned of the risk of protectionist measures to spark inflation and slow the economy.

Just weeks before Donald Trump returns to the White House with pledges to slap tariffs on US trading partners the OECD said “increases in trade-restrictive measures could raise costs and prices, deter investment, weaken innovation and ultimately lower growth.”

The Organisation for Economic Cooperation and Development, a Paris-based body that advises industrialised nations on policy matters, issues regular forecasts on the global economy and factors that could impact growth. The 0.1 percentage point increase in its 2025 global growth forecast, to 3.3 percent, was primarily due to stronger US growth.

But both France and Germany saw to 0.3 percentage point cuts to their 2025 growth forecasts, to 0.9 percent and 0.7 percent, as both countries face political crises amid mounting fiscal pressure.

The downgraded forecast comes as France’s new minority government faces being brought down Wednesday by lawmakers after it forced though the adoption of the social welfare budget.

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