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OECD’s latest economic outlook points to a cooling global economy over the next two years as higher effective tariff rates and persistent geopolitical uncertainty weigh on activity.
Global growth is projected to slow from 3.2% in 2025 to 2.9% in 2026 before recovering modestly to 3.1% in 2027. The US is expected to decelerate from 2.0% growth in 2025 to 1.7% in 2026, while the Eurozone will hover near 1.2%–1.4% through 2027. China’s growth is seen easing from 5.0% in 2025 to 4.3% by 2027 as structural and external pressures build.
Near-term momentum is expected to soften as global trade and investment absorb the impact of higher tariffs, weaker confidence, and ongoing policy uncertainty. OECD expects conditions to improve toward late 2026 as the drag from tariffs fades, financial conditions ease, and lower inflation supports demand.
Inflation is expected to continue moderating. Headline CPI across the G20 is projected to fall from 3.4% this year to 2.9% in 2026 and 2.5% in 2027. By mid-2027, inflation is expected to be back to target in most major economies, allowing central banks additional flexibility to support growth if needed.
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