Released this morning, the latest economic outlook from the Organisation for Economic Co-operation and Development (OECD) downgrades the growth prospects for the world, U.S. and Canada. U.S. trade policy and the countermeasures of other countries are at the centre of the gloomier outlook.*

The OECD now sees global GDP growth slowing to 3.1% in 2025 and 3.0% in 2026, citing “higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty.”

As for the U.S., GDP growth is projected to slow from 2.8% in 2024 to 2.2% in 2025 and 1.6% in 2026.

Global economic growth in 2025 will be 0.2 points lower than the OECD projected in December. It also shaved 0.2 points off of its forecast for the United States.

Canada’s growth received a much larger downgrade of 1.3 points compared to the December outlook, taking it from what was to be 2.0% growth this year and next to just 0.7% for both years.

The OECD’s outlook for Canada is very similar to our forecast (coming out this Thursday), but we see a bit more strength in 2026. According to our outlook, Canada’s real GDP expands by 0.6% this year and 1.2% next year. The stronger performance next year in our forecast likely reflects our assumption that the tariffs come off mid-2026 whereas the OECD has them continuing throughout next year.

Watch for more details on our Canadian and Alberta forecast in Thursday’s edition of The Twenty-Four.

On the inflation front, the OECD sees price growth rising to an annual average of 3.1% in Canada this year compared to 2.4% last year. This is significantly higher than the 2.0% inflation rate it was projecting in December before incorporating a trade war with the U.S. At 2.9%, inflation in Canada continues to run above target in 2026.

*These projections are based on an assumption that bilateral tariffs between Canada and the United States and between Mexico and the United States are raised by an additional 25 percentage points on almost all merchandise imports. Activity would be stronger and inflation lower in all three economies if these tariff increases were lower or confined to a smaller range of goods, but global growth would still be weaker than previously expected. Higher and broader increases in trade barriers would hit growth around the world and add to inflation.

Answer to the previous trivia question: It varies by which source you consult, but Alberta has 160+ billion barrels of proven (a.k.a. recoverable) oil reserves.

Today’s trivia question: What was the total value of Alberta’s merchandise exports to Ireland last year?