Paris: The Organization for Economic Cooperation and Development (OECD) on Tuesday downgraded its global economic growth forecast to 2.9% for both 2025 and 2026, down from 3.1% in its previous outlook, citing rising trade barriers, tighter financial conditions, and mounting policy uncertainty.
According to Anadolu Agency, the slowdown is concentrated in the United States, Canada, Mexico, and China, with other economies expected to see smaller downward adjustments, as noted in the OECD’s latest Economic Outlook report. The report highlighted that the global economic environment is becoming increasingly challenging, with substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty posing risks to GDP growth.
The report warned that if these trends continue, they could substantially dampen economic prospects. Rising trade costs, particularly in countries implementing new tariffs, are likely to fuel inflation, although this may be partly offset by softer commodity prices. Key concerns for the future include further escalations or sudden shifts in trade policies, more cautious behavior from consumers and businesses, and continued repricing of risk in financial markets.
Inflation may stay elevated for longer than expected, especially if inflation expectations continue to rise. However, the report suggests that lifting trade barriers as soon as possible may boost economic growth and help ease inflationary pressures.
The US economy, which grew by 2.8% last year, is expected to grow by 1.6% this year and 1.5% in 2026, lower than the previous estimates of 2.2% for this year and 1.6% for next year. In the Eurozone, growth is expected to increase from 0.8% in 2024 to 1% this year and 1.2% in 2026, consistent with the previous report.
The Chinese economy is projected to slow from 5% growth in 2024 to 4.7% this year and 4.3% next year, down from the previous projections of 4.8% for 2025 and 4.4% for next year. In Trkiye, the economy is estimated to expand by 2.9% in 2025 and 3.1% in 2026, also down from the previous estimate of 3.1% for this year and 3.9% for 2026. The annual inflation in Trkiye is expected to ease to 31.4% this year and to 18.5% next year.
Additionally, Trkiye’s budget deficit to GDP ratio is expected to fall from 4.9% in 2024 to 3.3% in 2025 and 3% in 2026. The report noted that Trkiye has been one of the fastest-growing economies in the OECD over the past decade. However, the income gap with OECD countries remains large and structural challenges persist. More prudent macroeconomic policies are helping to restore sustainable growth and reduce economic imbalances and should be pursued.
Over the long term, improving public finances in Trkiye will require more efficient consumption taxes, a broader income tax base, and strengthened social assistance. Higher labor market participation is also key, the report added.