"AI is helping global economic growth" - OECD: Investments in this sector are offsetting tariffs
Global economic growth is continuing better than expected as a boom in investment in artificial intelligence helps offset some of the shock from rising U.S. tariffs, the OECD said, raising its outlook for several major economies.
However, the Paris-based organization warned that global growth was vulnerable to any new flare-up in trade tensions, while investor optimism about artificial intelligence could trigger a stock market correction if expectations are not met.
In its Economic Outlook, the Organization for Economic Co-operation and Development forecast that global growth would slow modestly from 3.2% in 2025 to 2.9% in 2026, leaving its forecasts unchanged from its last assessment in September. It predicted a recovery to 3.1% in 2027.
The US economy is forecast to grow by 2% in 2025, revised down from 1.8% in September, before slowing to 1.7% in 2026 - from 1.5% forecast in September.
Investment in artificial intelligence, fiscal support and expected Federal Reserve rate cuts are helping offset the impact from tariffs on imported goods, reduced immigration and federal job cuts, the OECD said. China's growth is expected to remain steady at 5% in 2025, up from 4.9% in September, before slowing to 4.4% in 2026.
The eurozone growth forecast for 2025 was revised up to 1.3% from 1.2%, supported by resilient labor markets and rising public spending in Germany.
Global trade growth is expected to moderate from 4.2% in 2025 to 2.3% in 2026, as the full effects of tariffs weigh on investment and consumption.
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