Trade tensions, geopolitical and political uncertainties weigh on economic prospects, indicates, Monday, March 17, the Organization for Economic Cooperation and Development (OECD), which revives the growth prospects of many countries for 2025, including the United States. “We are sailing in troubled waters,” Alvaro Santos Pereira, OECD economist in the OECD economist, told the world economy, to summarize the global economy, the dynamics of which promise to be whollyy in the coming months in the face of the fragmentation of global trade and the inflationist tensions that it could generate.
If global economic activity remained “resilient” in 2024, with an increase of 3.2 % of the gross domestic product (GDP), the OECD now expects growth of 3.1 % in 2025, against 3.3 % in its previous projections in December. The United States, of which President Donald Trump sparked a trade war with his main partners, should see their GDP increase by 2.2 % this year, before 1.6 % next year according to the OECD, which thus lowers 0.2 and 0.5 point of growth in the country respectively.
The virulence of trade policies decided or envisaged by Donald Trump particularly affects Canada and Mexico, which carry out a significant part of their trade with the United States. Compared to December, the OECD divides by almost three Canada growth forecast for 2025, at 0.7 %. It even drops 2.5 points that of Mexico, which should enter a recession this year. The growth of the United States, Mexico and Canada “should slow down, according to projections as the customs duties come into force,” said the OECD.
“European economies will undergo less direct economic effects”
In its forecasts, the international institution specifies having only taken into account, in addition to customs duties between the United States, Canada and Mexico, the new customs duties in force between the United States and China, and those on steel and aluminum. Neither the threats of reciprocal customs duties nor those concerning the European Union issued by Donald Trump have been taken into account. Despite this, the OECD revised downwards for the second consecutive time its growth forecasts for Germany and France in 2025. It expects an increase of 0.4 % of GDP this year in Germany, against 0.7 % in its previous forecasts. France is less severely affected, with an expected growth at 0.8 % this year, down 0.1 points compared to December.
“European economies will undergo less direct economic effects” of customs measures integrated into the projections of the OECD, “but increased geopolitical and political uncertainty should nevertheless slow down growth,” she explains. Among the main European economies, only Spain should experience sustained growth, with growth expected at 2.6 % in 2025. The geopolitical uncertainty that affected Europe could however have a virtue for growth in European Union, with “an increase in public spending devoted to defense” which could “support short -term growth”, notes the OECD. On the other hand, these additional public spending may “accentuate budgetary tensions in the longer term”, tempers the organization.
Stable China growth
Another major partner in the United States and the fourth world economy, Japan also sees its growth forecast lowered, to 1.1 % (-0.4 point). Chinese growth should reach 4.8 % in 2025, almost stable forecast compared to December forecasts (+ 0.1), “the negative consequences for the taxation of customs duties being largely offset by the adoption of reinforced support measures”, explains the OECD.
In its report, the OECD points out the deleterious effect of trade tensions on world exchanges, which could not only slow down global production, but also accentuate inflation, which “should be higher than expected previously”. It thus sees inflation accelerating 2.8 % this year in the United States (+0.7 points compared to its previous forecast), after 2.5 % in 2024. “The increase in trade costs should gradually affect the prices of final products”, affirms the OECD, which would require “the maintenance of a restrictive monetary policy”. In addition, “a resurgence of inflation or unpleasant surprises for economic growth could lead to rapid price corrections on the financial markets and a new increase in market volatility”, warns the OECD.