OECD ups global growth forecast but warns of protectionism risk

THE Organisation for Economic Co-operation and Development (OECD) on Wednesday (Dec 4) raised its 2025 global growth forecast to 3.3 per cent, but warned of the risk of protectionist measures to spark inflation and slow the economy.

Just weeks before Donald Trump returns to the White House with pledges to slap tariffs on US trading partners, the OECD said “increases in trade-restrictive measures could raise costs and prices, deter investment, weaken innovation and ultimately lower growth”.

The Paris-based body, which advises industrialised nations on policy matters, issues regular forecasts on the global economy and factors that could impact growth.

The 0.1-percentage-point increase in its 2025 global growth forecast, to 3.3 per cent, was primarily due to stronger US growth.

But France and Germany saw 0.3-percentage-point cuts to their 2025 growth forecasts, to 0.9 per cent and 0.7 per cent, respectively, as both countries face political crises amid mounting fiscal pressure.

The downgraded forecast comes as France’s new minority government faces being brought down on Wednesday by lawmakers after it forced though the adoption of the social welfare budget. AFP