OECD lowers global growth outlook on trade tensions
In its latest report published on Monday, the Organization for Economic Co-operation and Development (OECD) lowers global growth outlook on trade tensions, seeing stronger inflation pressures.
Additional takeaways
OECD cuts US 2025 growth forecast to 2.2% from 2.4% and 2026 to 1.6% from 2.1%.
OECD cuts Canada's 2025 and 2026 growth forecasts to 0.7% from 2%.
OECD trims 2025 global growth forecast to 3.1% from 3.3% and cuts 2026 to 3% from 3.3%.
Higher-than-expected inflation could prompt more restrictive monetary policy and spook financial markets.
OECD raises the 2025 Chinese growth forecast to 4.8% from 4.7%, leaving the 2026 forecast unchanged at 4.4%.
Simulation shows that a broad-based trade war will cost US households $1600 and cost public finances more than extra tariff income generates.
OECD slashes Mexico's 2025 growth forecast to -1.3% from 1.2%, cuts 2026 outlook to -0.6% from 1.6%.
Simulation shows that a broad-based trade war could shave 0.3 percentage points off global growth and 0.7 percentage points for the US.
Market reaction
Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.
Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
