OECD: World Economy Forecast to Grow   12/02 06:16

   The world economy has proven surprisingly durable in the face of President 
Donald Trump's trade wars, the Organization for Economic Cooperation and 
Development said Tuesday, upgrading its outlook for global and U.S. economic 
growth this year.

   WASHINGTON (AP) -- The world economy has proven surprisingly durable in the 
face of President Donald Trump's trade wars, the Organization for Economic 
Cooperation and Development said Tuesday, upgrading its outlook for global and 
U.S. economic growth this year.

   The 38-country OECD now forecasts that the world economy will grow 3.2% this 
year, down a tick from 3.3% in 2024 but an improvement on the 2.9% it had 
predicted for 2025 back in June. The organization, which does 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 U.S. growth this year -- to 2%, up 
from the 1.6% it had forecast in June. Still, even with the upgrade, the 
American economy -- the world's largest -- would have grown considerably more 
slowly than it did in 2024 (2.8%).

   Since returning to the White House in January, Trump has overhauled U.S. 
trade policy, imposing taxes on imports to build a protectionist wall around 
the previously open American economy.

   The trade barriers were widely expected to slow growth and push up costs. 
But his tariffs have come in lower than the ones he threatened to impose in the 
spring. Many companies beat the levies by importing foreign goods into the 
United States before they took effect. And the U.S. and world economies are 
getting a 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 higher trade barriers and significant policy 
uncertainty," OECD Secretary-General Mathias Cormann wrote in a commentary 
accompanying the forecasts. Still, he added: "We expect higher tariffs to 
gradually feed through to higher prices, reducing growth in household 
consumption and business investment.''

   The OECD expects China, the world's No. 2 economy, to grow 5% this year, 
same as in 2024. It sees the 20 economies that share the euro currency 
collectively expanding 1.3% in 2025, lackluster but up from 0.8% in 2024.

   India, which has supplanted China as the world's fastest-growing major 
economy, is expected to generate 6.7% growth this year, up from 6.5% in 2024.