OECD Slashes US Growth Outlook on Tariffs, Uncertainty

The Organisation for Economic Co-operation and Development (OECD) on Tuesday sharply lowered its growth forecasts for the U.S., citing an increasingly challenging world outlook due to the fallout from tariffs and policy uncertainty.

The Paris-based organization also trimmed its global growth projections.

The OECD said it expects the U.S.’s annual real gross domestic product (GDP) growth rate to fall to 1.6% in 2025 and 1.5% in 2026 from 2.8% in 2024. In March, the OECD had forecast U.S. growth at 2.2% this year and 1.6% next year.

The OECD also cut its forecasts for global GDP growth to 2.9% this year and next from 3.3% in 2024, assuming tariff rates as of mid-May are left unchanged. In March, it had forecast global GDP growth of 3.1% for 2025 and 3.0% for 2026. “The slowdown is concentrated in the United States, Canada, Mexico and China, with other economies expected to see smaller downward adjustments,” it said.

“Substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty all pose significant risks to growth,” the OECD added. “If these trends continue, they could substantially dampen economic prospects.”