PARIS, December 3, 2025: The Organisation for Economic Co-operation and Development (OECD) has projected that the global economy will expand by 3.2 percent in 2025, defying concerns about the impact of escalating trade tensions between the United States and its major trading partners. The Paris-based organization said that despite the growing uncertainty caused by tariff disputes and supply chain realignments, global growth remains resilient, supported by strong labor markets, moderating inflation, and a rebound in investment across several emerging economies. The OECD’s latest Global Economic Outlook report highlights that while the ongoing trade war between the United States and China, and more recently between the United States and the European Union, has unsettled financial markets, the overall economic momentum has held steady.
The report attributes this to robust consumer spending and fiscal stimulus measures in several large economies, which have helped offset the negative effects of protectionist policies. According to the OECD, growth in the United States is expected to moderate slightly to 2.4 percent this year, reflecting the drag from higher tariffs and tighter financial conditions. However, domestic demand continues to be buoyed by a resilient job market and rising wages. The eurozone economy is forecast to expand by 1.5 percent, supported by easing energy costs and gradual recovery in industrial production. In contrast, China’s growth is expected to slow to 4.8 percent amid weaker exports and ongoing structural adjustments within its property and manufacturing sectors.
Emerging markets fuel optimism in growth outlook
The report warns that geopolitical tensions, including the widening trade rift between Washington and Beijing, could weigh more heavily on growth if additional tariffs are imposed or supply chain disruptions intensify. The OECD also notes that policy uncertainty may deter long-term business investment, particularly in high-tech manufacturing and green energy sectors, which are increasingly caught in the crossfire of strategic competition between major economies. Emerging markets have shown signs of renewed strength, particularly in India and Southeast Asia, where domestic reforms and infrastructure spending continue to attract foreign investment. India’s economy is projected to grow by 6.5 percent, driven by strong consumer demand and digital expansion.
The OECD also cited improved economic performance in Latin America and parts of the Middle East, where fiscal reforms and energy diversification initiatives are beginning to yield results. Despite these positive developments, the OECD cautioned that inflation pressures remain a risk, even as price growth has eased from last year’s peaks. Global inflation is expected to average 3.6 percent in 2025, with wide variation across regions. Central banks are anticipated to maintain a cautious stance on interest rate cuts, prioritizing price stability while ensuring that monetary conditions do not overly constrain recovery. The OECD called on policymakers to focus on reinforcing supply-side resilience, strengthening trade cooperation, and accelerating investment in clean technologies to support sustainable growth.
Policy coordination critical to avoiding economic divide
“The global economy has shown remarkable adaptability in the face of persistent shocks,” the report stated, “but further progress will depend on restoring confidence in the international trading system and advancing coordinated fiscal and structural reforms.” In summary, while global growth is expected to hold steady at 3.2 percent, the OECD underscored that the world economy remains vulnerable to policy missteps and geopolitical fragmentation. The organization emphasized that renewed dialogue on trade, climate cooperation, and digital regulation will be critical to sustaining recovery and preventing a deeper divide in the global economic landscape. – By EuroWire News Desk.