• OECD forecasts global economic growth to decline to 2.9% in 2025, down from 3.3% in 2024.
• The U.S. economy is projected to grow only 1.6% in 2025, affected by rising tariffs and trade tensions.
• Inflation in the U.S. could approach 4% by the end of 2025 due to higher trade costs.
• OECD warns that failures to negotiate trade deals could exacerbate global economic challenges.
• Consumer confidence in the U.S. has deteriorated, with potential impacts on spending and job growth.

According to the Organisation for Economic Co-operation and Development (OECD), global economic growth is expected to decelerate to **2.9%** in 2025, down from **3.3%** in 2024, largely due to the increasing impact of tariffs imposed by President Donald Trump. The OECD cited **"substantial increases" in trade barriers**, tighter financial conditions, and heightened policy uncertainty as key contributors to this negative forecast, particularly for the U.S. economy, which is projected to grow by only **1.6%** in 2025, down from **2.2%** in earlier estimates, according to Reuters, India Times, and ABC News.

The report highlights that U.S. tariffs are expected to raise inflation, with predictions of an increase to **3.9%** by the end of 2025. The OECD also mentioned that **U.S. import tariffs have surged**, raising average rates to **15.4%**, the highest level since **1938**, impacting consumer purchasing power and business investment decisions. The organization's chief economist, Álvaro Pereira, indicated that **"a significant increase in trade barriers"** would negatively impact consumer and business confidence, as noted by BBC and HuffPost.

As a result of these tariffs, the OECD warns of a potential for **stagflation**—a situation where inflation rises alongside stagnant economic growth—which could have wide-reaching ramifications for both consumers and businesses alike. Consumer sentiment has already been negatively affected, registering declines for four consecutive months. This sentiment is crucial as consumer spending constitutes about **two-thirds** of U.S. economic activity, emphasizing the potential for further economic slowdowns, reports Africa News and India Times.

The OECD's updated outlook underscores the urgency for countries to negotiate and finalize trade agreements to mitigate adverse economic impacts, as highlighted by Pereira's caution against retaliatory tariffs, which could worsen the less favorable outlook for the global economy. **"Keeping markets open and decreasing trade barriers will be essential,"** Pereira emphasizes, advocating for collaborative negotiation to stabilize financial markets and bolster economic growth, according to TRT World and CBS News.