The OECD has revised its G20 growth forecast for 2025 down to 3.1% from 3.3%, and for 2026, it's now 2.9% instead of 3.2%. This adjustment reflects the negative impact of higher trade barriers and policy uncertainty, which are dampening investment and spending.
OECD cuts G20 growth forecasts amid trade war
The US economy is projected to grow 2.2% in 2025 (down from the 2.4% forecast in December) and 1.6% in 2026 (down from 2.1%). Canada's growth outlook has been sharply reduced to 0.7% for both years (from 2%), while Mexico's economy is now expected to contract by 1.3% in 2025 and 0.6% in 2026, reversing earlier growth predictions. In Europe, the Eurozone's growth forecast for 2025 is now 1.0% (down from 1.3%), with a 1.2% growth rate expected in 2026 (down from 1.5%).
Downgrades for Germany, France, and Italy
These revisions reflect downgrades for Germany, France, and Italy, partly offset by an upward adjustment for Spain. The UK’s growth projection has also been lowered to 1.4% in 2025 (from 1.7%) and 1.2% in 2026 (from 1.3%). Meanwhile, China’s economy is expected to grow 4.8% this year (slightly higher than the previous 4.7% forecast) before slowing to 4.4% in 2026.
