The Organisation for Economic Co-operation and Development (OECD) offers most recent forecast for the global economy in its June Economic Outlook. Over the next two years it expects:
- Global growth is projected to slow from 3.3% in 2024 to 2.9% throughout 2025 and 2026. This projection is based on the assumption that tariff rates as of mid-May are sustained. The global outlook is worsening, with rising trade barriers, tighter financial conditions, and policy uncertainty.
- GDP growth in Australia is projected to recover to 1.8% in 2025, followed by a modest increase to 2.2% in 2026 after a period of weak economic activity. Although Australia is not directly impacted by the changes in U.S. tariffs, it still faces significant risk from a sharp economic slowdown in China, particularly through its influence on commodity prices.
- Headline inflation in the Euro area is expected to decline from 2.4% to 2.2% in 2025, and ease further 2.0% across 2026. Inflation in the US is projected to pick up to 3.9% in 2025 driven by increased import costs, but is expected to gradually decline in 2026, supported by moderate economic growth and a rise in unemployment. G20 headline inflation is projected to ease from 6.2% to 3.6% in 2025 and 3.2% in 2026. Despite recent declines in overall inflation, rising goods inflation driven by food costs, and growing protectionism have pushed inflation expectations higher in several countries.
- Australia’s headline inflation is projected to fall from 3.2% to 2.3% across 2025 and 2026. Although headline inflation has dropped to the 2-3% target range since September 2024, core inflation is still slightly elevated. Disinflation in Australia has occurred with minimal impact on the labour market, as strong job growth—driven by high net immigration—has kept unemployment low.
OECD Economic Outlook, selected countries (June 2025)
| |
|
2023 |
2024 |
2025 |
2026 |
| Real GDP growth, % |
World |
3.4 |
3.3 |
2.9 |
2.9 |
| |
G20 |
3.8 |
3.4 |
2.9 |
2.9 |
| |
United States |
2.9 |
2.8 |
1.6 |
1.5 |
| |
Euro area |
0.5 |
0.8 |
1 |
1.2 |
| |
Australia |
2 |
1.1 |
1.8 |
2.2 |
| Headline Inflation, % |
G20 |
6.3 |
6.2 |
3.6 |
3.2 |
| |
United States |
3.8 |
2.5 |
3.2 |
2.8 |
| |
Euro area |
5.4 |
2.4 |
2.2 |
2 |
| |
Australia |
5.6 |
3.2 |
2.3 |
2.3 |
