“Global growth proved more resilient than expected in the first half of 2025, especially in many emerging markets,” the OECD said. Growth is expected to slow further to 1.5% in 2026 due to higher tariffs, weaker immigration and cuts to the federal government workforce. “While the full impact of tariff increases is still unfolding, early signs of effects are visible in consumer behaviour, labour markets and prices,” the report said. GDP growth for the euro area is forecast to slow to 1.2% in 2025 and 1.1% in 2026, “with increased trade frictions and geopolitical uncertainty somewhat offset by stronger public investment and easier credit conditions.”The OECD said inflation is expected to ease in most G20 countries as growth and labour markets weaken. “However, inflationary pressures could resurface,” it cautioned, noting companies have initially absorbed some of the added costs of higher tariffs, reducing their margins.