The global economy is plunging, but it's not yet clear how fast. In its interim forecasts published on Monday, March 17, the Organisation for Economic Co-operation and Development (OECD) expected global growth to reach 3.1% in 2025, then 3% in 2026, after recording 3.2% in 2024, against a backdrop of trade wars and uncertainties linked to the policies of US President Donald Trump.
Some drops are likely to be harder than others. Growth in the US is set to almost halve in just two years, falling from 2.8% in 2024 to 2.2% in 2025, then to 1.6% in 2026. The US president, who in early March ruled out any possibility of recession, merely acknowledged a "period of transition." By imposing tariffs of 25% on its two neighbors, the US will drag down not only Mexico, whose gross domestic product (GDP) is set to decline by 1.3% in 2025 before recovering slightly, but also Canada (0.7% in 2025) and Brazil (2.1% in 2025).
"The imposition of new bilateral tariff rates and the associated increase in policy and geopolitical uncertainty will act as a drag, particularly on business investment and trade," explained the OECD, pointing out that "negative impacts are projected to be particularly severe in Canada and Mexico, given greater trade openness."
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