Get the lowdown on global economy trends for 2025-2026
Predicted Slowdown in Economic Growth: OECD Adjusts 2025 and 2026 Outlook Downward
Brace yourself, kids, because the economy's about to take a turn for the worse, thanks to Donnie's tariffs.
The skinny on the US economy:
- US GDP is expected to go from a 2.8% dip in '24 to a 1.6% dive in '25, and a dismal 1.5% in '26. Inflation's gonna reach almost 4% by the end of '25.
- China's economy, on the other hand, is projected to slow to a 4.7% growth in '25 and 4.3% in '26.
- The EU economy is forecast to expand by a measly 1% in '25 and 1.2% in '26.
- Russia's GDP growth is expected to be barely 1% in '25 (down from 1.3% in March) and a pitiful 0.7% in '26 (down from 0.9%).
The sluggish global economic growth is all thanks to Trump's trade wars. The OECD predicts the world trade volume will rise by 2.8% in '25 and 2.2% in '26, which is a measly 0.8 and 1.3 percentage points lower than their December forecasts.
The IMF expects global GDP to expand by 2.8% in '25 (down from their initial 3.3%) and 3% in '26 (also down from 3.3%). The IMF has brightened their projections for Russia's GDP in '25 to 1.5%, but it's been revised down to 0.9% for '26. The IMF has also downgraded their predictions for U.S. economic growth to 1.8% in '25 (from 2.7%) and 1.7% in '26 (from 2.1%).
Russia's Ministry of Economic Development predicts that the country's GDP will surge by 2.5% in '25, with inflation on track for 7.6% for the year.
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Some nitty-gritty, for those interested in the details:
- Economic Impact on the U.S.: The tariffs have resulted in reduced GDP growth, higher inflation, and increased federal tax revenues, but at the cost of consumer purchasing power and economic stability.
- Global Economic Impact: The tariffs have slowed down global real GDP growth, with significant slowdowns in major regions like China, Europe, and emerging economies.
- Trade Deficit and Tariff Effects: The trade deficit narrowed due to a drop in imports, but the overall impact of tariffs on GDP is negative, leading to a reduction in market income.
[1] OECD[2] Thomas et al. (2019)[3] Petri, Plummer, & Trefler (2019)[4] Census Bureau
Finance experts predict that the anticipated economic slump in 2025-2026, driven by political trade policies, will impact the global business sector significantly. Despite the US GDP forecast to contract, the IMF remains vigilant, anticipating a 2.8% global economic expansion in 2025, albeit a downgrade from their initial projection. The general-news landscape will continue to follow the unfolding effects of protectionist policies on the international economy.
