The global economy will grow less strongly this year than expected, and economic uncertainties are increasing, partly due to American President Donald Trump’s trade policy.
The Organisation for Economic Co-operation and Development (OECD) reports this in a new report.
According to the Paris think tank, the global economy will grow 3.1 percent this year. In December, the OECD predicted growth of 3.3 percent. Next year, growth should slow to 3 percent.
The eurozone’s organisation is counting on a growth of 1 percent this year, less than the 1.3 percent previously expected. The forecast for the American economy, the largest in the world, is now 2.2 percent. Previously, 2.4 percent was expected. For China, the world’s second-largest economy, the forecast was revised slightly upwards to 4.8 percent.
Canada and Mexico
Mexico is expected to show an economic contraction this year, while growth was previously expected. The country suffers significantly from Trump’s import duties because the US is Mexico’s most important trading partner. This also applies to Canada. Growth of 0.7 percent is now predicted for 2025. That was previously 2 percent.
The OECD states that increasing trade barriers and economic uncertainty make companies more cautious with investments and households more reluctant to spend.