The global economy is expected to grow by 3.2% this year, more than expected despite the US trade war

WASHINGTON (AP) — The global economy has proven surprisingly resilient in the face of President Donald Trump’s trade wars, the Organization for Economic Cooperation and Development said Tuesday, raising its forecasts for global and U.S. economic growth this year.

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The 38-nation Organization for Economic Cooperation and Development now expects the global economy to grow 3.2% this year, down slightly from 3.3% in 2024 but an improvement from the 2.9% it forecast for 2025 in June. The organization, which conducts economic research and promotes international trade and prosperity, expects global growth to slow to 2.9% next year.

The OECD also raised its forecast for US growth this year – to 2%, up from the 1.6% it forecast in June. However, even with the upgrade, the US economy – the world’s largest – would have grown much slower than it did in 2024 (2.8%).

Since returning to the White House in January, Trump has overhauled US trade policy, imposing taxes on imports to build a firewall around the previously open US economy.

Trade barriers were widely expected to slow growth and raise costs. But his tariffs were lower than those he threatened to impose in the spring. Many companies circumvented the duties by importing foreign goods into the United States before they took effect. The economies of the United States and the world are getting a strong boost from massive investments in artificial intelligence.

“The global economy has been resilient this year, despite concerns about a sharper slowdown in the wake of rising trade barriers and significant policy uncertainty,” OECD Secretary-General Matthias Cormann wrote in a commentary accompanying the forecast. He added: “We expect that higher tariffs will gradually lead to higher prices, reducing growth in household consumption and corporate investment.”

The Organization for Economic Co-operation and Development expects China, the world’s second-largest economy, to grow by 5% this year, the same as in 2024. It sees the 20 economies that share the euro currency expanding collectively by 1.3% in 2025, dull but up from 0.8% in 2024.

India, which has replaced China as the world’s fastest-growing major economy, is expected to grow by 6.7% this year, up from 6.5% in 2024.