Despite the weaker medium-term outlook, global growth in the first half of 2025 proved more resilient than expected.

PARIS, Sept. 23 (Xinhua) -- Global gross domestic product (GDP) growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025, and further to 2.9 percent in 2026, according to the Organization for Economic Cooperation and Development (OECD) in its latest Economic Outlook released Tuesday.

The OECD said the downward revision from its previous forecast reflects the end of "front-loading" of trade and the impact of higher tariff rates and persistent policy uncertainty, which are dampening investment and global commerce.

Despite the weaker medium-term outlook, global growth in the first half of 2025 proved more resilient than expected, particularly in many emerging-market economies. Industrial production and trade were temporarily boosted as businesses accelerated shipments ahead of tariff hikes.

Since May, the United States has sharply raised bilateral tariff rates on nearly all trading partners. The OECD estimated the effective U.S. tariff rate had climbed to 19.5 percent by the end of August, the highest level since 1933.

The report cautioned that risks to the outlook remain elevated. Potential triggers for weaker growth include further tariff escalation, renewed inflationary pressures, heightened fiscal concerns, and financial market instability.

For the United States, GDP growth is forecast to decline from 2.8 percent in 2024 to 1.8 percent in 2025, and then to 1.5 percent in 2026, as strong investment in high-tech sectors is outweighed by the drag from tariffs and lower net immigration.

In the euro area, GDP is projected to grow 1.2 percent in 2025 and 1.0 percent in 2026. While easier credit conditions provide some support, trade frictions and geopolitical uncertainty are expected to limit momentum.

Looking ahead, the OECD emphasized that structural reforms are essential to sustainably raise living standards and fully capture the benefits of emerging technologies such as artificial intelligence.