The Organization for Economic Cooperation and Development (OECD) warns about the risks and uncertainty currently facing the global economy, which forces monetary authorities to remain vigilant against wage and price pressures. Mathias Cormann, Secretary-General of the OECD, mentioned that there are significant downside risks, such as trade fragmentation and increasing trade tensions.
The OECD has lowered its growth forecasts for most of its member countries, predicting a slowdown in global growth to 3.1% this year and 3% in 2026. Growing trade uncertainty is hindering business investment and consumer spending, affecting countries like Canada, Mexico, and the United States.
The OECD highlights that the rising costs of trade will lead to stronger inflation than anticipated. This will cause central banks to maintain restrictive policies for a longer period. Inflation is expected to exceed the targets set by authorities in several countries, including the United States.
Although European economies seem to face fewer direct effects from trade wars, the OECD forecasts an impact on the region due to uncertainty. Additionally, China is expected to show resilience this year thanks to support from its domestic policy, although a slowdown is anticipated in 2026.
The OECD concludes that to achieve sustainable economic growth and improve living standards, it is essential to have efficient global markets and a rules-based trading system. Although the current forecasts from the OECD are pessimistic, they emphasize that there are upside risks if tariffs are reduced and policy becomes more stable.
