The latest Interim Economic Outlook from the Organisation for Economic Co-operation and Development (OECD) describes a world economy that has held up better than feared in 2025, even as tariff shocks and policy uncertainty weigh on momentum. Global GDP is now projected to rise by 3.2% this year, up from the June forecast of 2.9%, but it is expected to slow to 2.9% in 2026. The G20 follows a similar trajectory, with growth at 3.2% this year and easing to 2.9% next year.

According to the report, the brighter near-term picture rests on several positives. Industrial production and global trade benefited from front-loading ahead of higher United States tariffs, lifting output early in the year. Investment in high-technology sectors, such as AI, has provided additional momentum in the United States, offsetting some of the drag from rising protectionism. In China, fiscal support has helped counteract weakness in the property market and strained trade conditions. Across emerging markets, one-off gains also played a role, including agricultural surges in Brazil, softer consumer price figures in India, significant stock building in Türkiye, and a rebound in Indonesian investment.

Among large emerging economies, China is now forecast to expand by 4.9% in 2025, up from 4.7% in June, before easing to 4.4% in 2026. India remains the standout performer, projected to grow 6.7% this year, up from 6.3%, before slowing to 6.2% in 2026. Brazil is seen at 2.3%, up from 2.1%, and 1.7% in 2026, while Turkey’s growth is expected to come in at 3.2%, up from 2.9%. Meanwhile, South Africa’s outlook is weaker, with growth of 1.1% in 2025, a downward revision from 1.3% expected in June, and it is expected to rise to 1.3% in 2026.

The OECD concludes that despite looming risks, the combined effect of strong early-year industrial activity, fiscal support, and technology-driven investment has left the global economy entering late 2025 on a firmer footing than previously expected.