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Huge economy encounters sharpest slowdown named
(MENAFN) The Organization for Economic Co-operation and Development (OECD) has identified the United States as the major economy expected to experience the steepest slowdown amid a global downturn. The OECD’s latest global outlook, released Tuesday, projects US growth to fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026, down from an earlier forecast of 2.2% growth for next year.
The slowdown is attributed to rising tariffs, escalating trade policy uncertainty, a sharp decline in net immigration, and a significant reduction in the federal workforce. Since January, President Donald Trump has implemented broad tariffs to protect domestic industries, including a 10% levy on all imports and higher rates targeting China, Mexico, Canada, and the EU. Although some tariffs have been temporarily suspended for negotiations, the strategy aims to bring manufacturing jobs back to the US and reduce the trade deficit.
The OECD also predicts US inflation will approach 4% by the end of 2025 and stay above the Federal Reserve’s 2% target through 2026, potentially postponing interest rate cuts. Chief economist Alvaro Pereira urged governments worldwide to reduce trade barriers, warning that failure to do so could have severe global consequences.
Global growth is expected to slow to 2.9% in 2025 and 2026, below the post-pandemic average of over 3%. Besides the US, Canada, Mexico, and China are also forecast to face significant economic deceleration.
The slowdown is attributed to rising tariffs, escalating trade policy uncertainty, a sharp decline in net immigration, and a significant reduction in the federal workforce. Since January, President Donald Trump has implemented broad tariffs to protect domestic industries, including a 10% levy on all imports and higher rates targeting China, Mexico, Canada, and the EU. Although some tariffs have been temporarily suspended for negotiations, the strategy aims to bring manufacturing jobs back to the US and reduce the trade deficit.
The OECD also predicts US inflation will approach 4% by the end of 2025 and stay above the Federal Reserve’s 2% target through 2026, potentially postponing interest rate cuts. Chief economist Alvaro Pereira urged governments worldwide to reduce trade barriers, warning that failure to do so could have severe global consequences.
Global growth is expected to slow to 2.9% in 2025 and 2026, below the post-pandemic average of over 3%. Besides the US, Canada, Mexico, and China are also forecast to face significant economic deceleration.

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