The global economy is projected to remain resilient despite significant challenges, according to the December economic outlook report of the Organisation of Economic Co-operation and Development (OECD). Global GDP growth is projected to be 3.3 percent in 2025 and 2026, up from 3.2 percent in 2024, amid an expected easing of inflation. Inflation in the OECD countries is expected to ease further, from 5.4 percent in 2024 to 3.8 percent in 2025 and three percent in 2026, supported by the still restrictive monetary policy in most countries. In addition, global trade volumes are recovering, with a projected increase of 3.6 percent in 2024.
Growth prospects vary significantly across regions. GDP growth in the US is projected to be 2.8 percent in 2025, before slowing to 2.4 percent in 2026, while euro area GDP growth is projected at 1.3 percent in 2025 and 1.5 percent in 2026. Growth in Japan is expected to expand by 1.5 percent in 2025 but then decline to 0.6 percent in 2026, while China is anticipated to continue to slow, with GDP growth of 4.7 percent in 2025 and 4.4 percent in 2026.
According to the report, uncertainty regarding the outlook remains. An intensification of the ongoing conflicts in the Middle East could disrupt energy markets and hit confidence and growth. Rising trade tensions might risk hampering trade growth. Adverse surprises related to growth prospects, or the path of disinflation could trigger disruptive corrections in financial markets. Meanwhile, growth could also surprise on the upside. Improvements in consumer confidence or an early resolution to major geopolitical conflicts could also improve sentiment and lower energy prices.