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

The 38-country OECD now forecasts that the world economy will grow 3.2 per cent this year, down a tick from 3.3 per cent in 2024, but an improvement on the 2.9 per cent it had predicted for 2025 back in June. The organisation, which does economic research and promotes international trade and prosperity, expects global growth to slow to 2.9 per cent next year. The OECD also raised its forecast for US growth this year – to two per cent, up from the 1.6 per cent 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 US 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 US 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.’